Ongoing legal advice with a predictable budget

What remuneration models are available?

‘Fixed price’ can refer to different models. The right structure depends on how predictable the consultancy requirements are.

• Monthly retainer. Fixed availability and defined basic services are agreed; additional work is agreed separately. This suits regular but fluctuating needs.
  
• Service package. This covers a fixed number or type of recurring services. This is suitable for standardisable contractual and consultancy matters.
  
• Hourly or value-based allowance. A monthly budget is transparently offset against the services provided. This is suitable for broad needs where there is a desire for tight budget control.
  
• Cap model. Billing is based on actual time and effort, but only up to an agreed upper limit. This is suitable for projects with a recognisable but not precisely definable scope.
  
• Hybrid model. A basic retainer is combined with discounted time-based rates or fixed project prices. This is suitable for companies requiring ongoing consultancy and undertaking individual larger projects.
  

A retainer is not merely an advance payment for hours worked; rather, it specifically remunerates availability, institutional knowledge, regular meetings, maintenance of templates, training and proactive risk management. At the same time, it should remain clear which services have actually been provided.

Pricing is typically determined by the number of companies, locations and users, the required areas of law, as well as contract volume and complexity. Other factors include response and availability requirements, languages and international coordination, as well as existing templates and processes. Finally, the calculation takes into account anticipated escalations and projects, as well as reporting and system requirements. An implementation or pilot phase helps to calibrate the volume and scope of services based on real-world data.

Scope of Services, Intake and Service Levels

The scope of services should be specific enough to manage expectations, but not so detailed that every minor query turns into a dispute over scope. Typical ongoing services include reviewing and negotiating recurring client and supplier contracts, corporate law administration and standard employment law matters. This also includes support with data protection and compliance issues, the legal assessment of operational decisions, and the maintenance of templates, playbooks and approval processes.

In addition, the provider coordinates specialist or overseas advisers, training sessions and regular risk reviews.

Intake and prioritisation

Enquiries should be submitted via defined channels. A brief briefing setting out the objective, deadline, contact person and relevant documentation reduces the need for follow-up queries. Priorities can, for example, be categorised as critical, urgent, normal and plannable.

Response times

A service level describes the initial qualified response, not necessarily the complete solution. A complex contract cannot realistically be finalised within the same timeframe as a brief operational query. It therefore makes sense to set different target times based on priority and complexity.

Reporting

Good monthly reporting does not merely show hours or tickets. It covers issues dealt with and their status, budget utilisation and forecasts, as well as recurring risk patterns. This includes outstanding decisions of the managing directors, projects outside the scope of the contract, and suggestions for improving contracts and processes. 

Limitations of the model and change requests

Legal-as-a-Service is suitable for recurring and predictable advisory work. It does not automatically replace the separate management of large or exceptional projects. Typical exceptions include corporate acquisitions, funding rounds and restructurings, extensive due diligence, and court and arbitration proceedings. Regulatory investigations and crises, major restructurings or large-scale measures, as well as highly specialised tax, competition, patent or regulatory matters, are also usually excluded from the flat-rate package.

The same applies to projects involving significant travel, data room or local counsel costs. This distinction should not be made only at the time of invoicing. A formalised change request process includes a description of the additional task, its classification as a package service or project, as well as the effort involved, budget and timetable. It concludes with approval by the designated contact person and separate reporting.

Even a permanently higher volume requires a rule. Options include adjusting the monthly budget, allocating an additional volume block or reverting to time-and-materials billing for certain categories. Depending on the model, unused budget may lapse, be carried over to a limited extent or be used for defined preventative measures. Unlimited accumulation is usually neither economically nor operationally sensible.

When is Legal-as-a-Service suitable?

The model is particularly suitable for companies that regularly have legal queries but do not require a fully-fledged legal department, that wish to manage several specialist areas via a central point of contact, and that want to make costs and response times more predictable. It is also suitable where contract and approval processes need to be standardised and legal risks need to be identified at an earlier stage, rather than simply reacting to escalations. It is less suitable where the need for legal advice is very infrequent or where work consists almost exclusively of individual large-scale projects.