PANGEA3 LLC

One thing law firms fear almost as much as angry Circuit court judges are fixed fees. Historically, law firm partners and law firm management like to keep risk squarely on the client using the taxi cab model. Get in and start the meter. Traffic? The client pays. Construction? The client pays. An accident? The client pays. The taxi stops, hours are totaled and the client pays the bill.

There’s a better way for clients and for firms.

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Firms are more reluctant than ever to take work for a fixed fee for a variety of reasons. First, starting salaries are up. Way up. In New York City, starting salaries now top $150,000 a year. Many whisper that they’re headed north again. Second, firms now de-equitize partners. Taking on the risk that one’s practice might not be sufficiently profitable is terrifying for most of the risk averse professionals who pursue careers in the law.
Better to let the client pay full freight for as many hours as I can frighten my associate into billing. In short, margins are tighter than they once were, clients are less forgiving and partners are more conscious than ever of the economics of their practice.

India, however, fixing fees no longer need be a scary prospect. Why?

1. Indian legal services are less expensive. If you fix your fee and use a skilled professional in India whose hourly rate is significantly less than half of the fully loaded rate of your U.S. associates (don’t forget expensive real estate, summer programs, secretarial and IT support, benefits and central administration), suddenly, there is not as much worry that an engagement will be a money loser, even if it takes longer than anticipated.

2. With India, throughput is higher. Face facts. It’s expensive to idle lawyers in America. Ideally, every lawyer in your firm is busy all day, every day. 2000+ associate hours a year, every year is what partners want to hear. In reality, its not possible to have everyone busy all the time.
Extended slack periods resulted in what were euphemistically referred to as “right-sizing” of firms a few years back. Because it is far less expensive to retain talent in India, it is easier for firms like Pangea3 to idle capacity in anticipating of large projects. A U.S. patent firm can’t keep four or five mechanical engineers around just hoping that a project will come in. Pangea3 can. And does. A U.S. litigation firm can’t keep 35 document reviewers on staff waiting for a document review to trip across the threshold. Pangea3 can. And does. We hire prospectively so that when your clients come to you with fixed price work and wants quick turn around, we already have the teams in place to handle the work. You get the ability to ramp up quickly without the high fixed overhead of idling expensive U.S.
resources.