Can you expand on this? It sounds plausible, but then so does the narrative being pushed by the “new law” firms – that clients want alternative fee structures because they don’t like the open-ended cost of time billing.
Not OP but former litigator turned programmer here. This gets very complicated because saying "legal work" is a giant generalization for a broad field. But talking about this with my peers (still a slice of the market) we arrived at this:
There are three types of legal work (exceptions, yada yada, but mostly):
1. Normal people shit. Parking tickets and most criminal law, etc. Flat fees fine and usually nice so your clients understand (and understand their ability to actually pay your rate). Work itself can be pretty predictable, or taken on contingency for civil stuff.
2. Line of business legal work. If you fuck this up it sucks, but rarely is it a material risk to the value of the company. This work is usually brought in-house ASAP, to control costs. Before that point, you see both hourly and flat fee work, mostly based on client sophistication to negotiate such things.
3. Bet-the-company (and white collar/wealthy criminal) work. Here clients only care about one thing: WINNING. You win M/A by closing. You win regulatory work by clearing the way for profit making activity. You win bet the company litigation by....winning. The cost of legal services, even at hourly rates, are negligible compared to the profit making ability success unlocks (or unlocks the continued existence of the company, a guy not going to prison). Clients rarely give a shit what or how you charge as long as you win. They will pay whatever "winners" charge. They will only bitch about costs if they percieve themselves to not be winning.
You cant talk about this as if legal work is the same. That's probably why you percieve a disconnect as an outsider.
So, contrary to the OP, you would argue that clients don’t like time billing, but when the stakes are high, the price doesn’t matter. That makes more sense to me than the idea that clients actually like a pricing model that encourages inefficiency.
It's not really open ended. The client can stop any time they decide the legal fees are no longer worth the benefits. And even traditional law firms do often work on a fixed fee or contingency fee basis for certain types of cases.
You cannot stop any time you like once you start litigating. Capitulation, or paying new lawyers to get up to speed and continue fighting for you, will both result in very large immediate costs. In that situation many people will feel compelled to continue paying their lawyers long after the budget that supported the initial decision to litigate has been spent.
That's not how it actually works in expensive litigation. The type of litigants who can afford such legal fees at all do understand the sunk cost fallacy and are capable of making fairly objective decisions about whether to continue.
