Stansbury Weaver breaks through traditional law firm mold, eliminates hourly billing
Three years ago, Mark Stansbury was at a cocktail party for technology industry professionals as part of his networking duties as the leader of a boutique Bexley law firm. He ran into a client there who was flush with cash after he had just helped him close a $10 million venture capital round. The client told him about a human resources issue he was dealing with. “He mentioned offhand that he just Googled the issue rather than calling us because he didn’t want to incur the cost of a 10-minute phone call, even though he had all that money in the bank.”
The conversation didn’t shock Stansbury, the co-founder of the Stansbury Weaver law firm. Yet, at the same time, it was kind of shocking. The client had just relied on Stansbury to close a transformational round of funding and therefore valued his services. Yet he admitted he didn’t want to pay him to deal with this smaller issue under the billable hour payment model that law firms traditionally use.
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“He didn’t want the meter to be running,” Stansbury says. “It got me thinking, ‘There’s a ridiculous amount of friction here even for companies that have the resources to pay and yet really don’t want to. Is it more psychological than financial?’ These things that might seem like small matters can turn into huge problems if they’re not properly addressed.”
Stansbury Weaver eliminates hourly billing
After that conversation, Stansbury began contemplating an alternative to hourly billing. After years of working with entrepreneurs and startups, he and his partners felt the traditional law-firm model was broken. The belief is that most law firms maximize short-term profit by billing clients for every interaction. That punishes the type of open, ongoing communication that Stansbury Weaver feels is critical to the success of early stage and fast-growing companies and the development of relationships. As the firm puts it on its website: “And, anyway, what business likes getting invoiced ‘0.2 - attention to phone call’ and ‘0.1 - attention to email?’”
In 2019, Stansbury Weaver started experimenting with what it now calls “general counsel as a service.” A simple monthly subscription gives clients unmetered access to the legal team at the firm, including on dedicated Slack channels. There are different levels of subscriptions that include extra recurring standing meetings to set a regular cadence for check-ins. The experiment became permanent during the pandemic and those standing meetings moved to Zoom.
“The entire pricing structure encourages ongoing communication though Slack, calls, texts and email,” Stansbury says. “In this model, no one is worried about figuring out an hourly bill for a text message. That means the client can come to the firm with small questions or questions they think are silly, but they don’t want to pay $500 an hour to get an answer to. Sometimes finding answers to those types of questions are really helpful for a client.”
And if a client’s question takes a team effort to solve, the client isn’t paying billable hours for multiple lawyers.
Under the new billing model, the firm handles intellectual property, human resources, capital and transactional matters for its clients. The firm’s most common projects include creating new businesses, raising angel and venture capital, buying and selling businesses, trademark registration and general contracting for sales, procurement and other commercial arrangements.
For Stansbury Weaver, the new model has resulted in more stable and predictable cash flow. Stansbury also thinks the model encourages efficiency. Larger firms that also litigate, for example, don’t have as strong of an incentive to solve problems before they become big problems.
“Our mantra is to build fences at the top of the cliff so you don’t need ambulances at the bottom,” Stansbury says. “We want to solve problems before they become ambulance-worthy problems.”
What clients say
eFuse is a growing technology company in Columbus that describes itself as “LinkedIn for gamers.” CEO Matthew Benson founded the company in 2018 and raised an initial round of funding of $1.4 million in 2019. As the company started hiring more and contemplating its next funding round, its legal fees were ramping up. Benson decided to take his business to Stansbury Weaver in the beginning of 2020 to have a predictable flat fee that covered all of eFuse’s legal needs. eFuse, in fact, worked with Stansbury Weaver to close a $6.5 million funding round this year, and the firm also has helped him with trademark issues.
“As a first-time founder, there are a lot of things I don’t know and being able to ask those questions is important while still knowing it won’t break the bank,” Benson says. “The flat fee also helps a growing business from a planning perspective.”
All Paws Retreat, a dog daycare and boarding business in Franklinton, also has been a Stansbury Weaver client for the past year and has had the firm help it with human resources, building contracts and writing online policies.
“As a small business owner, you never know what is going to come up. Think about a negative review on social media or a disgruntled employee,” says Owner Casie Goldstein. “This relationship really protects us and makes us feel a little bit more stable in an environment that can seem so uncertain. For us, the firm is on speed dial. I don’t have to get in the queue to set up a meeting. If I need them, they’re right there.”
Laura Newpoff is a freelance writer.
2154 E. Main St., Bexley 43209
Business: Corporate law and strategy consulting boutique law firm
Top officers: Mark Stansbury
and John Weaver
Revenue: Would not disclose
Ohio clients: eFuse, Land Grant Brewing, PriorAuthNow, Renter Mentor, Refill Technologies, All Paws Retreat