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Corporate law firms have traditionally billed their clients on an hour

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Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   Updated on: 03 Sep 2021, 11:30
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Corporate law firms have traditionally billed their clients on an hourly basis. However, in the current economy, it is increasingly common for law firms worldwide to offer clients alternative billing structures. Seeking a competitive advantage, many law firms now earn much of their compensation in the form of an unguaranteed bonus which is paid upon completion of the firm's work and the amount of which depends on the success of that work. The terms of these alternative compensation schemes are documented in engagement agreements that specify the bonus the client will pay the firm given various outcomes of the case. Particularly with first-time clients, a compensation structured on such a bonus can be a highly effective marketing tool, especially if the client is very cautious in selecting legal service providers, a high hourly billing rate is a barrier to client engagement, the firm often loses potential clients to firms with lower hourly rates, or the consequences to the client of a negative outcome are severe.

On the other hand, these bonus-based compensation structures can sometimes hinder law firms' marketing efforts. Sophisticated clients may be wary of firms offering such structures, understanding that the firm may have less incentive to provide independent, objective advice and instead advise the client to take undue risks in the hope of winning a larger bonus payout. Such structures may mislead less sophisticated clients by suggesting that the outcomes of certain cases will necessarily be favorable. A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business. Indeed, law firms with exceptional reputations and a track record of success have little to gain by offering an alternative to the long standing norm of hourly billing.

1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?

a. A law firm's offer of a bonus-based compensation structure leads a client to believe that the success of his or her case is a foregone conclusion.
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
c. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm may give riskier advice than it would if it were working on an hourly basis.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.
e. A law firm's offer of a bonus-based compensation structure makes a client suspect that a firm's objectivity may be compromised.


2. The primary purpose of this passage is to

a. justify the popularity of a behavior
b. evaluate the usefulness of a practice
c. demonstrate how to implement a program
d. discuss the ethics of a business activity
e. explain the reasons for pursuing a strategy


3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?

a. Success-based bonuses violate the legal profession's standard of practice.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.


4. All of the following are mentioned in the passage as circumstances in which law firms can benefit from offering a bonus fee structure EXCEPT:

A. The law firm has difficulty retaining its current clients.
B. The law firm has difficulty winning clients over competitors who offer lower hourly fees.
C. Clients perceive a firm's hourly billing rate to be prohibitively high.
D. The adverse effects of a negative outcome of the case are significant for the client.
E. The client is reluctant to quickly sign a contract with a new law firm.


5. Which of the following is cited in the passage as a goal of some law firms in offering a bonus fee structure?

A. minimizing the firm's liability in certain cases
B. successfully competing with other firms
C. justifying increases in total fees paid by clients
D. improving the reputation of the legal profession
E. improving the quality of the firm's legal counsel

ShowHide Answer Question #1
Official Answer
D
ShowHide Answer Question #2
Official Answer
B
ShowHide Answer Question #3
Official Answer
B
ShowHide Answer Question #4
Official Answer
A
ShowHide Answer Question #5
Official Answer
B

Originally posted by LordStark on 21 Oct 2018, 08:38.
Last edited by Sajjad1994 on 03 Sep 2021, 11:30, edited 4 times in total.
Added q#4 and 5
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   21 Oct 2018, 21:27
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PeepalTree wrote:
Corporate law firms have traditionally billed their clients on an hourly basis. However, in the current economy, it is increasingly common for law firms worldwide to offer clients alternative billing structures. Seeking a competitive advantage, many law firms now earn much of their compensation in the form of an unguaranteed bonus which is paid upon completion of the firm's work and the amount of which depends on the success of that work. The terms of these alternative compensation schemes are documented in engagement agreements that specify the bonus the client will pay the firm given various outcomes of the case. Particularly with first-time clients, a compensation structured on such a bonus can be a highly effective marketing tool, especially if the client is very cautious in selecting legal service providers, a high hourly billing rate is a barrier to client engagement, the firm often loses potential clients to firms with lower hourly rates, or the consequences to the client of a negative outcome are severe.

On the other hand, these bonus-based compensation structures can sometimes hinder law firms' marketing efforts. Sophisticated clients may be wary of firms offering such structures, understanding that the firm may have less incentive to provide independent, objective advice and instead advise the client to take undue risks in the hope of winning a larger bonus payout. Such structures may mislead less sophisticated clients by suggesting that the outcomes of certain cases will necessarily be favorable. A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business. Indeed, law firms with exceptional reputations and a track record of success have little to gain by offering an alternative to the long standing norm of hourly billing.
1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?
a. A law firm's offer of a bonus-based compensation structure leads a client to believe that the success of his or her case is a foregone conclusion.
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
c. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm may give riskier advice than it would if it were working on an hourly basis.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.
e. A law firm's offer of a bonus-based compensation structure makes a client suspect that a firm's objectivity may be compromised.

2. The primary purpose of this passage is to
a. justify the popularity of a behavior
b. evaluate the usefulness of a practice
c. demonstrate how to implement a program
d. discuss the ethics of a business activity
e. explain the reasons for pursuing a strategy

3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.




5:57 Minutes, All correct!
Nice passage!

[/box_in][box_in]1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?
a. A law firm's offer of a bonus-based compensation structure leads a client to believe that the success of his or her case is a foregone conclusion.-Mentioned in second passage.
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients-Mentioned in second passage.
c. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm may give riskier advice than it would if it were working on an hourly basis.-Mentioned in second passage.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis-Correct, not mentioned in second passage but is Mentioned in FIRST passage.
e. A law firm's offer of a bonus-based compensation structure makes a client suspect that a firm's objectivity may be compromised.
-Mentioned in second passage.
2. The primary purpose of this passage is to
a. justify the popularity of a behavior-Popularity is incorrect. Author's tone is evaluative.
b. evaluate the usefulness of a practice-Correct,, usefulness of Hourly billing rate is evaluated by author.
c. demonstrate how to implement a program-How to is incorrect!
d. discuss the ethics of a business activity-Ethics is out of scope over here.
e. explain the reasons for pursuing a strategy-Author didn't explain reasons in favor of one.

3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice.-Nowhere mentioned.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.-Mentioned, refer " Such structures may mislead less sophisticated clients by suggesting that the outcomes of certain cases will necessarily be favorable. .."
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.Nowhere mentioned.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.Nowhere mentioned.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.Nowhere mentioned.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   22 Oct 2018, 09:02
3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.


please explain question 3!
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   22 Oct 2018, 16:51
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nik021 wrote:
3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.


please explain question 3!



for inference and details questions we need supporting evidence from the passage. Option B is supported by following

Quote:
especially if the client is very cautious in selecting legal service providers, a high hourly billing rate is a barrier to client engagement, the firm often loses potential clients to firms with lower hourly rates,


None of the other options have any supporting information.

I hope it helps.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   22 Oct 2018, 18:20
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I always consider myself very bad in RC.
In This one I got all correct in ~8 min, perhaps the passage was easy or not, may be lucky guesses. in need to do it in 6 min.
reading time - 2.58
1st - 2.44
2nd - 30 sec
3rd - ~2.44

1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?
P2 is more around the problems. Only D stand out.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.

----------------------------------

2. The primary purpose of this passage is to
a. justify the popularity of a behavior - no justify; no behavior
b. evaluate the usefulness of a practice - yes; two types; good and bad is defined for both; practice of law firms.
c. demonstrate how to implement a program - no demonstrate; no implement
d. discuss the ethics of a business activity - no ethics
e. explain the reasons for pursuing a strategy - no strategy was chosen by author.

----------------------------------------------

3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice. - may be ethics but not true in real sense.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance. --- yes.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past. -- not really talking about bonus-based fee structure
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone. - no
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services. - no such comparison.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   15 Nov 2018, 10:40
aragonn wrote:
I always consider myself very bad in RC.
In This one I got all correct in ~8 min, perhaps the passage was easy or not, may be lucky guesses. in need to do it in 6 min.
reading time - 2.58
1st - 2.44
2nd - 30 sec
3rd - ~2.44

1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?
P2 is more around the problems. Only D stand out.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.

----------------------------------

2. The primary purpose of this passage is to
a. justify the popularity of a behavior - no justify; no behavior
b. evaluate the usefulness of a practice - yes; two types; good and bad is defined for both; practice of law firms.
c. demonstrate how to implement a program - no demonstrate; no implement
d. discuss the ethics of a business activity - no ethics
e. explain the reasons for pursuing a strategy - no strategy was chosen by author.

----------------------------------------------

3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice. - may be ethics but not true in real sense.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance. --- yes.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past. -- not really talking about bonus-based fee structure
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone. - no
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services. - no such comparison.



Hi aragonn Dont you think in 1 D means ----> The company is charging more than ordinary, from the point that Sophisticated clients feel thatlaw firms will fight wish riskier approaches ? I mean I somehow linked it like risk ----> win more ----> SC shell out more money.

Please point out the flaw in my reasoning.

TIA
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   16 Nov 2018, 05:59
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ShankSouljaBoi

So what you need to do to solve 1st. 2nd para has described problems in bonus based approach. 1st list down all those problems. All of the options are one of those problems (example of) but one . We need to find that one.

Problems:
1. Sophisticated clients may be wary of firms offering such structures, understanding that the firm may have less incentive to provide independent, objective advice and instead advise the client to take undue risks in the hope of winning a larger bonus payout.

2. Such structures may mislead less sophisticated clients by suggesting that the outcomes of certain cases will necessarily be favorable.

3. A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business.

a. A law firm's offer of a bonus-based compensation structure leads a client to believe that the success of his or her case is a foregone conclusion. --- problem 2
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients. --- problem 3
c. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm may give riskier advice than it would if it were working on an hourly basis. ---- problem 1
e. A law firm's offer of a bonus-based compensation structure makes a client suspect that a firm's objectivity may be compromised. --- problem 1

d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.

Quote:
1 D means ----> The company is charging more than ordinary, from the point that Sophisticated clients feel thatlaw firms will fight wish riskier approaches ? I mean I somehow linked it like risk ----> win more ----> SC shell out more money.

Well none of the problem is saying that customers have any problem with the money , they are paying. it about what they are thinking. their perception. D is what stand out.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   12 May 2019, 19:22
VeritasKarishma GMATNinja generis

What can be infereed by the term "foregone conclusion"??
This term is mentioned in option A of 1st question.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   13 May 2019, 01:01
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warrior1991 wrote:
VeritasKarishma GMATNinja generis

What can be infereed by the term "foregone conclusion"??
This term is mentioned in option A of 1st question.


"success is a foregone conclusion" means "success is certain".

When something is a "foregone conclusion", it means it is a given, it is certain.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   13 May 2019, 22:23
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Ritwick91 wrote:
LordStark wrote:
Corporate law firms have traditionally billed their clients on an hourly basis. However, in the current economy, it is increasingly common for law firms worldwide to offer clients alternative billing structures. Seeking a competitive advantage, many law firms now earn much of their compensation in the form of an unguaranteed bonus which is paid upon completion of the firm's work and the amount of which depends on the success of that work. The terms of these alternative compensation schemes are documented in engagement agreements that specify the bonus the client will pay the firm given various outcomes of the case. Particularly with first-time clients, a compensation structured on such a bonus can be a highly effective marketing tool, especially if the client is very cautious in selecting legal service providers, a high hourly billing rate is a barrier to client engagement, the firm often loses potential clients to firms with lower hourly rates, or the consequences to the client of a negative outcome are severe.

On the other hand, these bonus-based compensation structures can sometimes hinder law firms' marketing efforts. Sophisticated clients may be wary of firms offering such structures, understanding that the firm may have less incentive to provide independent, objective advice and instead advise the client to take undue risks in the hope of winning a larger bonus payout. Such structures may mislead less sophisticated clients by suggesting that the outcomes of certain cases will necessarily be favorable. A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business. Indeed, law firms with exceptional reputations and a track record of success have little to gain by offering an alternative to the long standing norm of hourly billing.
1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?
a. A law firm's offer of a bonus-based compensation structure leads a client to believe that the success of his or her case is a foregone conclusion.
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
c. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm may give riskier advice than it would if it were working on an hourly basis.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.
e. A law firm's offer of a bonus-based compensation structure makes a client suspect that a firm's objectivity may be compromised.

2. The primary purpose of this passage is to
a. justify the popularity of a behavior
b. evaluate the usefulness of a practice
c. demonstrate how to implement a program
d. discuss the ethics of a business activity
e. explain the reasons for pursuing a strategy

3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.




Can anybody explain why option B is wrong in Q-1? I am not able to understand as where it is mentioned in para-2.


Look at the second last line of second paragraph:
A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business.

b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
Hence, this can be deduced. A firm desperate for business means it doesn't have enough business.

Option (D), on the other hand, is not implied anywhere.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   12 Mar 2021, 07:49
In Question 1, I cannot locate where is Option B mentioned. Can someone please highlight the lines in the passage that state the same. Thanks

b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   14 Mar 2021, 09:36
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Pankaj0901 wrote:
In Question 1, I cannot locate where is Option B mentioned. Can someone please highlight the lines in the passage that state the same. Thanks

b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.



Hi Pankaj0901,

Quote:
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.


The line to look for is:
"A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business."
This is exactly opposite of what is mentioned in the option. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm actually has no clients since this compensation structure makes the firms look desperate for business.

Thus we cannot infer B from the passage.

Hope This Helps.
Thanks.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   15 Mar 2021, 01:44
Thank you so much bm2201

I interpreted it the complete opposite.

Quote:
The line to look for is:
"A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business."
This is exactly of what is mentioned in the option. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm actually has no clients since this compensation structure makes the firms look desperate for business.


If a firm is desperate, it implies that this firm has multiple similar clients and so the chances of success is high. As firm would have developed expertise by handling similar profile cases, increasing its chances of success. And, hence the firm is desperate.

I understood where I went wrong. Thanks a lot!


bm2201 wrote:
Pankaj0901 wrote:
In Question 1, I cannot locate where is Option B mentioned. Can someone please highlight the lines in the passage that state the same. Thanks

b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.



Hi Pankaj0901,

Quote:
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.


The line to look for is:
"A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business."
This is exactly of what is mentioned in the option. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm actually has no clients since this compensation structure makes the firms look desperate for business.

Thus we cannot infer B from the passage.

Hope This Helps.
Thanks.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   30 May 2021, 16:00
VeritasKarishma wrote:
Ritwick91 wrote:
LordStark wrote:
Corporate law firms have traditionally billed their clients on an hourly basis. However, in the current economy, it is increasingly common for law firms worldwide to offer clients alternative billing structures. Seeking a competitive advantage, many law firms now earn much of their compensation in the form of an unguaranteed bonus which is paid upon completion of the firm's work and the amount of which depends on the success of that work. The terms of these alternative compensation schemes are documented in engagement agreements that specify the bonus the client will pay the firm given various outcomes of the case. Particularly with first-time clients, a compensation structured on such a bonus can be a highly effective marketing tool, especially if the client is very cautious in selecting legal service providers, a high hourly billing rate is a barrier to client engagement, the firm often loses potential clients to firms with lower hourly rates, or the consequences to the client of a negative outcome are severe.

On the other hand, these bonus-based compensation structures can sometimes hinder law firms' marketing efforts. Sophisticated clients may be wary of firms offering such structures, understanding that the firm may have less incentive to provide independent, objective advice and instead advise the client to take undue risks in the hope of winning a larger bonus payout. Such structures may mislead less sophisticated clients by suggesting that the outcomes of certain cases will necessarily be favorable. A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business. Indeed, law firms with exceptional reputations and a track record of success have little to gain by offering an alternative to the long standing norm of hourly billing.
1. All of the following hypothetical situations exemplify a potential problem noted in the second paragraph EXCEPT which of the following?
a. A law firm's offer of a bonus-based compensation structure leads a client to believe that the success of his or her case is a foregone conclusion.
b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
c. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm may give riskier advice than it would if it were working on an hourly basis.
d. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm is trying to charge more than it would if it were working on an hourly basis.
e. A law firm's offer of a bonus-based compensation structure makes a client suspect that a firm's objectivity may be compromised.

2. The primary purpose of this passage is to
a. justify the popularity of a behavior
b. evaluate the usefulness of a practice
c. demonstrate how to implement a program
d. discuss the ethics of a business activity
e. explain the reasons for pursuing a strategy

3. The passage's description of the issue raised by a bonus-based fee structure for law firms most clearly implies that which of the following is true?
a. Success-based bonuses violate the legal profession's standard of practice.
b. Lawyers working on behalf of a client cannot always determine the outcome of a lawsuit in advance.
c. The dignity of the legal profession is undermined by new legal services that differ from those typically offered in the past.
d. Clients whose cases are not successful cannot be adequately compensated by financial settlements alone.
e. Predicting the cost of legal services is more difficult than predicting the costs of other professional services.




Can anybody explain why option B is wrong in Q-1? I am not able to understand as where it is mentioned in para-2.


Look at the second last line of second paragraph:
A firm's willingness to work for a bonus may even signal to potential clients that a firm is desperate for business.

b. A law firm's offer of a bonus-based compensation structure makes a client suspect that the firm has few existing clients.
Hence, this can be deduced. A firm desperate for business means it doesn't have enough business.

Option (D), on the other hand, is not implied anywhere.





Hi Karishma,
How does "desperate for business"necessarily mean that they have few clients and they need more ? Because business can be generated through either new clients or through just charging high. Could you please explain? Thanks
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   01 Jun 2021, 04:16
Hey nazmulhasandu, I am not an expert at RC but let me give your query a shot.

When is someone "desperate for business" when he/she has very few avenues available to earn income from. Keeping in mind this Reading Comprehension passage, law firms who allow the clients to pay for their legal services by assenting to an unguaranteed bonus are signaling that the firms costs are low, and if they have agreed to take on a client with this payment option means that the firm is confident of winning the case.
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink] New post   25 May 2023, 00:10
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Re: Corporate law firms have traditionally billed their clients on an hour [#permalink]
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