Measuring a piece of string

Lawyers, to their chagrin, acknowledge that their banking clients have commoditized - turned into a package which can be priced accurately - virtually every area of legal practice, except litigation. Bankers are used to having bond issues and syndicated loans negotiated and documented by lawyers on a fixed-fee basis. But litigation remains largely subject to the "piece of string rule" as in Q: How much will it cost? A: How long is a piece of string?

This is not simply a matter of lawyers' intransigence. Litigation is by definition risky: if the outcome of a dispute were clear-cut, the losing party would capitulate immediately and not incur the costs of fighting it. Since the outcome is not clear-cut, lawyers are unable to price the cost. It depends on how long the dispute takes to be resolved (in or out of court) and the intensity with which it is fought.

Contingency fees, where...