The Pricing of Legal Information – Slaw
peter.suber's bookmarks 2019-05-10
"There is a good reason why lawyers need to get retainers: unlike a house, the products they provide can’t be repossessed, and it’s difficult to know how much they are worth. Lawyers aren’t selling a win, they are selling information, advice, and services which aim to optimize the outcome based on the situation. Improved information is worth a great deal to clients in aggregate (I have done some research into the value of improved information for parties to litigation here), but it’s difficult to know how much particular information will be worth in a particular situation before it is acquired.
This leads to difficulties in how to price legal services, because lawyers want to make a good return on their labour and expertise, and clients tend to want to pay less than their services may be worth because they are informational in nature. Given this dynamic, it makes sense that lawyers would look for a mechanism like the billable hour to quantify the value of the work they deliver.
In turn, the work publishers and libraries do is also difficult to price. Large commercial legal publishers are well known for not disclosing the prices associated with their sales contracts and a large part of this is because they are trying to harvest as much value as possible from each customer. Different areas of practice are more or less profitable and different people value particular research tools differently, which means that they have different willingness to pay.
By charging everyone different rates, the publishers aim to get the maximum value customers are willing to pay...."