Law firm a low-cost alternative for small companies

When clients call Washington attorney Sue Wang, the clock doesn't start ticking.

Phone calls aren't billed in six-minute intervals and each hour of work won't cost several hundred dollars.

Wang and the four other lawyers in Clarity Law Group aim to reconfigure the billable-hour business model at law firms that she said tends to shut out small and start-up companies with shallow pockets.

"People have been speaking about the death of the billable hour, but people had been saying that for years and they weren't really acting on it," said Wang, formerly of Latham & Watkins.

Clarity Law Group is designed like a timeshare, where clients pay a set fee for access to the entire firm, Wang said. The firm also reduces costs by forgoing the standard luxuries at big-name firms like secretaries, wall art and swanky office space.

The firm opened its Illinois office last October and secured its Washington license in April.

"The relationship between attorneys and clients is not a friendly one," said Kim Le, who works at Clarity. "They're worried all the time about getting billed for every little thing, and that doesn't build a good, trust[ing] relationship."

While other firms around the country are also trying to lower the barrier of entry to legal services, Wang said the idea for Clarity came to her and her former University of Michigan law school roommate, Leah Goodman, while on a recent vacation in Greece.

At Clarity, each client is assigned two attorneys who act as the primary counsel, but any of the lawyers may be called on depending on the legal needs. It's a hybrid model between big-firm contractors and in-house counsel, Wang said.

The model can reduce a client's legal costs from about $200,000, which Wang and Goodman calculated as the typical price for an in-house attorney, to between $30,000 and $60,000.

Clarity now has "a few" clients, but Wang said the firm aims to attract more start-up and small, private companies, which Wang said are notoriously under-lawyered. She added that Clarity also offers deferred or deeply discounted legal services to some companies that have yet to receive financing.

"That's a Silicon Valley tradition that has not really found its way into D.C. yet," she said.

Until the firm grows, Wang and Goodman are funding it with their savings. Based on the demand they've seen for low-cost legal services at the small business level, however, they're confident there will be enough demand to make the firm profitable.

"Every business as new as ours probably shouldn't make very grandiose projections without sounding naive," said Goodman, who is based in Illinois. "I would say at the moment, we are comfortable with how good our prospects are and how much money we're going to be making in the future."