In an industry where the optimal use of resources and price competitiveness significantly impact client relationships and overall business sustainability, the roles of commercial finance and pricing professionals in law firms have never been more pivotal.
However, their work often remains behind-the-scenes, misunderstood, unappreciated, under-resourced and under-promoted within the firm. We can’t help but feel that in many firms these professionals continue to labour under the burden of the ‘non-lawyer’ pejorative.
Here, we endeavour to shed light on the importance of these roles and why their efforts and results deserve increased visibility within law firms.
Commercial finance professionals are the architects of a law firm's financial stability and future. Their role entails analysing financial health, setting budgets, projecting revenue, and more. They are the custodians of financial data, interpreting numbers and providing a roadmap for sustainable growth. Their decisions influence the firm's strategic plans, financial resilience, and, ultimately, its survival in an intensely competitive market.
On the other hand, pricing professionals work hand in hand with commercial finance to establish fair and competitive prices for the firm's services. They wield a powerful combination of financial acumen and market understanding to ensure prices are not only attractive to clients but also profitable for the firm. By analysing market trends, client demands, and cost structures, they develop pricing strategies that balance client satisfaction and firm profitability.
In the best resourced and run pricing teams we have worked with, the pricing function is a demonstrable profit centre, and yet many still view it as an overhead of questionable value.
Despite these substantial contributions, the efforts of commercial finance and pricing teams often remain unsung within law firms. Publicising their work, however, holds numerous benefits.
Firstly, it improves understanding and collaboration within the firm. When other departments comprehend the intricacies of commercial finance and pricing, it can enhance cooperation across different sectors of the firm, leading to more informed decision-making and a unified strategic direction.
Secondly, it fosters transparency. Sharing commercial finance and pricing data and strategies can demystify financial decisions, dispel misconceptions, and build trust among team members. It promotes a culture of openness, wherein each member understands the firm's financial standing and pricing strategies, leading to a collective push towards financial sustainability and growth.
Moreover, publicising these roles and their results can aid in managing client expectations. Clients are increasingly demanding more value, transparency, and predictability in legal costs. If law firms can demonstrate their rigorous pricing strategies and sound financial management, it can improve client relationships, resulting in better client retention and acquisition.
Lastly, celebrating the successes of commercial finance and pricing teams can foster a sense of accomplishment and motivation. Acknowledging their work boosts morale, helps retain top talent, and fosters a culture of excellence.
As law firms navigate an increasingly complex and competitive business environment, it is crucial to recognise the central role of commercial finance and pricing professionals. Their work is not merely about crunching numbers and setting prices; it's about guiding the firm's financial health, strategising for growth, and ensuring the firm remains competitive.
By publicising their efforts and results, law firms can cultivate a more collaborative, transparent, and motivated environment, ultimately contributing to improved client relationships and sustainable success.
Richard Burcher, Managing Director at Validatum® and Chairman of Virtual Pricing Director®