With Validatum Pricing Espresso® we aim to bring you your regular pricing 'shot' - the best, most interesting, thought provoking and informative material we can find globally which will be of interest, relevance and help to you in your legal services pricing challenges. [Note: we don't always agree with the content of others that we post but the philosophy of Validatum Pricing Espresso® is shared perspectives, not a personal 'soap-box']
Leading Legal Pricing Experts Launch AI-Powered Pricing Tool
Legal pricing experts Burcher Jennings and Validatum have today announced a ‘game changing partnership’ with cutting-edge legal tech firm Neota Logic set to disrupt the world of legal pricing for the benefit of clients and firms. The partnership is behind the imminent launch of Virtual Pricing Director – a new artificial intelligence (AI) powered legal pricing tool designed to make the pricing process quicker and easier for law firms.
With globally renowned legal pricing expert Richard Burcher’s insight built into the software for the benefit of firms of all sizes, Virtual Pricing Director is a ground-breaking software platform that combines world-leading pricing expertise and Neota Logic’s legal-tech innovation experience to deliver the confidence-building openness and transparency needed for 21st century pricing. Read more...
Delta's GC Advocates for Project-Based Billing
Peter Carter predicts that in 10 years, firms that have moved away from the billable hour are going to be market leaders.
Peter Carter has a prediction about the future of law firms—and it’s bold.
According to Carter, the executive vice president and chief legal officer at Atlanta-based Delta Air Lines, in 10 years, the firms that have figured out project-based billing are going to be the leaders. And those that are still sending invoices for billable hours will be left behind. “Accounting firms have figured out how to do this, consulting firms have figured out how to do this, investment bankers have figured out how to do this,” he says. “And so in my mind, I ask, ‘Why can’t lawyers?’” Read more...
Law Firms Are More Profitable Than Ever. How are They Doing It?
Given the obstacles law firms are facing, profitability shouldn't be increasing. A look at how firms are doing it.
Law firm profitability is at a record high. The average equity partner, at an Am Law 200 firm, received $1.8 million in profit sharing compensation last year. This is higher than any point in recorded history (the Am Law 200 data goes back to 1984). Average profits per equity partner are nearly $500k dollars more, in nominal terms, than they were at the peak in profitability experienced before the past downturn. Even after adjusting for inflation, profits per equity partner are $125k per year more than they were a decade ago. Not bad if you ask me. Read more...
The First Global 200 Survey Shows a Massive Revenue Gap
Our annual Global 100 list expands to the world's 200 largest firms—and the tiers become clear.
The 200 highest-earning law firms in the world hail from four different continents and brought in collective gross revenues of more than $135.6 billion in 2017. But The American Lawyer’s newly expanded global rankings showed a massive revenue gap between the Global 100 and the Global Second Hundred.
Within the Global 200’s collective total revenue, $29.99 billion came from the Second Hundred. By comparison, the 100 top-grossing firms in the world surpassed $100 billion in combined revenue for the first time in 2017, reaching $105.7 billion, as The American Lawyer reported last month in its Global 100 issue. That means that as a group, the Global 100 earned more than three times as much as their counterparts in the Second Hundred. Read more...
UK law firms see income rise - but profits are a different matter
UK firms have enjoyed a healthy year when it comes to fee income growth, but this has not necessarily translated into bigger profits, suggests a major new look at the sector.
According to PwC's Law Firms' Survey, published today, income has grown at 89% of UK firms in 2018, compared to 75% in the same period last year. However, profit margins for 32% of the top 100 firms fell this year.
PwC says the top 10 firms have suffered a fall in profit margins for the fourth consecutive year while the top 11-25 firms are closing the profitability gap. The top 51-100 band have outperformed the top 26-50 group. Read more...
The Science of Price Sensitivity - Yep, It’s A Thing
One of the many shortcomings in our current approach to pricing legal services is the preoccupation with merely pricing the job. While at face value this would appear to be all that is required, it is in fact only half of the calculation. The other half of the equation is pricing the client.
Pricing is contextual. Put simply, this means that legal services do not have an abstract value. To the extent that anything has value, someone has to be willing to buy it and the ‘value’ will be determined by what that person is willing to pay for it.
Like almost every other product or service, legal services only have a value; Read more...
It’s Not a Snowflake!
Using technology to understand and predict high-stakes litigation costs.
Ask litigators how much a complex litigation matter will cost, and they will respond with some version of “it depends”. This answer is deeply ingrained in many lawyers, who believe that each case is unique (like a snowflake); therefore, it is impossible to predict the costs.
For years, clients accepted this non-answer. Then, the market evolved. Read more...
By Failing to Collaborate, Law Firms Are Leaving Money on the Table
Firms are letting down clients and losing revenue.
Under pressure to develop deep expertise as a way to differentiate themselves in a crowded legal arena, many lawyers have focused more and more on a narrow aspect of the law—data privacy for financial institutions in the E.U., say, or public-private partnerships in the transportation sector. Like law firms themselves, clients are facing a world that is increasingly volatile, uncertain, complex and ambiguous. Clients need outside counsel that can collaborate to solve their problems, but law firms’ increased specialization creates an unfortunate conflict, and many are leaving big money on the table as a result. Read more...
Lawyers Maintain an Edge in Rising Billing Rates, Study Finds
Average law firm billing rates are keeping pace with inflation, a report found, but the picture is worse for nonlawyers.
Law firm rates across the U.S. are keeping pace with the rise in the cost of living, reaching an average of $245 per hour in 2018.
But billing rates for nonlawyers in firms are stagnant, according to a new study from Clio, a Canadian company that provides cloud-based practice management for firms. Read more...
Big Four Accounting Jostles Law Firms for Legal Services
Big Four accounting firms led by PwC topped the pack this year among the best-regarded alternative legal service providers, a new survey shows.
PwC Legal, which recently announced an affiliation with immigration law firm Fragomen, was No. 1 in the Global Alternative Legal Brand Index compiled by legal research firm Acritas.
Thomson Reuters, last year’s leader, was pushed into second place. Deloitte Legal, EY (the former Ernst & Young), KPMG Legal and Axiom followed. Read more...
KWM-WorkSafe enquiries ‘the beginning of the end of the billable hour’
The Australian legal profession will look back on the Improvement Notice issued to King & Wood Mallesons by WorkSafe Victoria as the “death knell” of the billable hour, according to the managing partner of a global firm.
In conversation with Lawyers Weekly, Clyde & Co Australian managing partner Michael Tooma said that if law firms keep accounting for people’s value based on the time they put in rather than by efficiency or quality, then the profession will continue to “incentivise a pattern of overwork”.
“We will look back on this event as the beginning of the end of the billable hour. It is very much the death knell of the billable hour,” he said. Read more...
Victory in Case Against FTC Offers Glimpse Into Ropes & Gray’s Hourly Rates
Although Ropes & Gray sought a discounted rate for its pro bono representation of LabMD in a data breach case, the firm's fee request provides insight into what one of the country's highest earning firms could charge per hour.
A fee request from Ropes & Gray and other lawyers representing beleaguered medical testing company LabMD Inc. in a federal appeal sheds light on the law firm’s billing rates, how much it discounts for pro bono cases and how its rates compare to rates at other firms.
On Oct. 4, lawyers for LabMD, including a team from Ropes & Gray that offered its services pro bono, asked the U.S. Court of Appeals for the Eleventh Circuit to approve $1.72 million in fees—a request that follows the company’s appellate victory in June against the FTC. Read more...
US Lawyers Spend Only 30 Percent of Workday on Billable Hours, Report Says
So what are they doing the rest of the day?
U.S. lawyers are still spending too little of their workday on billable hours, a year after an eye-opening report found lawyers devoted only 29 percent — 2.3 hours — of each eight-hour workday to billable hours.
This year’s Legal Trends Report, prepared by Clio, a Canadian company that provides cloud-based practice management for firms, found that the average utilization rate improved only incrementally to 30 percent, which is 2.4 hours of billable hours each workday. Read more...
LEGAL PROJECT MANAGEMENT
Legal Project Management — What Is It and Why Should You Care?
In almost every article in the legal press over the past few years, the term legal project management(LPM) has been mentioned. It has been described as a “must have” by some and a fad that will be fleeting by others. For the most part though, it is seen as a critical component of law firms’ response to their clients’ pressure for greater efficiency.
We spoke to Susan Raridon Lambreth, principal at LawVision, and founder of the LPM Institute, to get her thoughts on this issue. Lambreth and her colleague Carla Landry of LawVision will be presenting their ever-popular two-day LPM certification course on Oct. 29-30, in Sullivan & Cromwell’s New York offices. Read more...
How to Leverage Legal Data for Better Litigation RFPs
A look at the basic sections to include in your RFP, tips and tricks on how to best use legal analytics, and specific data points to enhance law firm selection.
When your company is looking down the barrel of federal litigation that’s bet the farm-level significant or that could cost millions to litigate, issuing and executing an RFP can not only help you obtain a range of estimates in terms of cost, but it can also reveal which law firms are prepared to handle the issues you face and achieve the results you want. Leveraging legal data and analytics on top of law firm RFP responses can provide your team with the critical insights you need to find the right firm for the job when your chips are on the table. Read more...
A Chat With Allens Pricing Chief Pier D'Angelo
In this monthly series, legal recruiting expert Amanda K. Brady from Major Lindsey & Africa interviews law firm management from Am Law 200 firms about how they navigate an increasingly competitive business environment. Discussions delve into how these key management roles are changing and introduce the people who aspire to improve and advance the business of law.
Next in this series is a conversation with Pier D'Angelo, chief pricing and practice officer at Allens, an international commercial law firm based in Australia, in alliance with Linklaters LLP. D'Angelo began his career as a mergers and acquisitions lawyer at Allens before transitioning into business development and later, the pricing role. D’Angelo has served in his current role since January 2013. Read more...