“I think this collaboration is really quite unique, says General Counsel Mei Ramsay. “You
must have a great deal of trust to embark on a project like this. Getting to the right fee was
facilitated by our history together.”
A change in mindset is required, says de Witts, to move to true value-based billing.
“Experienced practitioners know what things cost, so think about the value of the output
rather than how long it takes.”
Paying for Value, Rather than Time
BENDIGO & ADELAIDE BANK || 2015 ACC VALUE CHAMPION
At Australia’s Bendigo & Adelaide Bank, value-based pricing, disaggregation, insourcing, and
experimentation—combined with a prohibition on hourly-based fees for institutional panel
work—positioned the legal department as a thought leader within the legal profession and the
banking industry. Beginning several years ago under the direction of former Head of Group
Legal Maria Polczynski, work was disaggregated and insourced creatively, such as having
the bank lawyers as “solicitors on the court record” to avoid double-handling of routine trial
correspondence. Insourcing practices include sometimes calling upon other bank staff for
appropriate paralegal work. The legal team created self-service tools and conducted internal
training sessions to empower the appropriate staff to take a commercial approach to low-risk
However, it is in the area of value-based pricing with outside law firms that Bendigo was most
progressive. After two years of engaging firms only on the basis of fixed, value-based pricing,
but seeing variations and scope creep default back to hourly rates, Polczynski took a radical
line in 2014 by writing hourly charges out of the terms of engagement for all institutional
panel work. The bank’s institutional law firms agreed that, absent pre-agreed fixed prices, after-event discussions on pricing would start from the bank’s honest but subjective assessment
of the value delivered, without reference to hours or rates. This forced the clearer scoping of
work and desired outcomes and prompted specific discussions about work allocation in order
to price at the start. The resulting collaboration with panel firms has led to better alignment
between firm and client objectives.
Fixed pricing greatly enhanced budget predictability. Polczynski instituted some innovative
variations including pricing for “mini matters” and “mini retainers.” For litigation work,
introducing a rolling retainer with quarterly setting of the prospective monthly fee against
required deliverables resulted in costs that were reduced and smoothed, and rolling forecasts
that were more accurate.
Now general counsel for AMP Bank and head of compliance & regulatory risk for AMP
Group, Polczynski has the benefit of hindsight as she reflects on the innovations at Bendigo.