Most CRE companies using outside counsel would jump at the chance to pay their lawyers a flat fee for every deal. Law firms, however, aren’t typically so enthusiastic about the idea. So how can you get your outside counsel on board with flat fees? One of our customers came up with a pretty clever solution:
They looked at their total spending on outside counsel in a 12-month period and divided it by the number of lease deals they closed in that time. To keep the math simple, let’s say they did 50 deals in a year and spent $500,000 on outside counsel, an average of $10,000 per deal.
Next, they calculated the projected efficiency gains LeasePilot would bring to the outside counsel’s workflow, which amounted to about 35%, or $3,500 per deal. With these numbers in hand, they approached outside law firms with a proposal: the company would provide law firms with the LeasePilot software and pay a fixed fee of $8,250 per deal, which amounts to splitting the $3,500 savings between both parties.
The switch to a fixed fee structure was a no-brainer for all involved. The lawyers would be making more money by spending less time on each lease, and the company would save money on every deal (and get it done faster). The entire process was more predictable and everybody came out ahead. Who doesn’t love that?