How Much Should Legal Work Cost?

Legal departments track the discount they negotiated with their top firms closely. What a matter should actually cost is the number that deserves the same attention.

This ebook looks at why rate discounts only tell half the story, and how to build a should-cost baseline that actually holds up.

Rate cards measure the price of an hour. Matter costs are driven by how many hours the work takes. Negotiating a strong discount addresses the first variable and leaves the second one exactly where it started, which is why a real discount can still land alongside a total bill that feels too high.

Years of e-billing history already sit inside every organization's systems, activity by activity, invoice by invoice. Analyzed well, that history becomes the basis for a genuine should-cost estimate, a forward-looking number grounded in what the organization has actually paid, adjusted for how the economics of legal work are shifting, including AI's growing effect on effort. 

In this ebook, you'll learn:

• What a rate discount actually measures: The billable hour ties revenue to time, which means a negotiated rate operates entirely within the existing effort model.
• How to judge an RFP by a baseline that holds up: A comparison against an organization's own historical spend shows whether a result is a fair price relative to that organization's own experience.
• Where third-party benchmarking earns its keep: Aggregated market data offers a strong directional check on hourly rates and works best for teams building out their own historical picture.
• Why should-cost estimates evolve every year: AI is compressing the hours behind common activities like document review, and a credible estimate reflects that shift as it happens.
• How faster data analysis brings should-cost estimates to scale: Work that once required an analyst and weeks of manual reconciliation can now support should-cost baselines across a full matter portfolio.

Get the framework for grounding outside counsel spend in a defensible, forward-looking number built from your own organization's history.