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With Validatum Pricing Espresso® we aim to bring you your morning 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.

'We Lost on Price' - Post Hoc Ergo Propter Hoc

Bids

Post hoc ergo propter hoc is a logical fallacy that states, "Since event Y followed event X, event Y must have been caused by event X." And that pretty much sums up our response to missing out on a piece of work or appointment to a panel. "We submitted a price, we missed out on the work therefore we must have lost on price."

However, even if you have been told that that is the reason why you missed out on the work, appearances can be deceptive. It is worth taking a closer look because things are not always as they seem.Read more...

PwC Survey: ‘Pricing & Profitability’ Tops Law Firm’s Priorities

Value-v-Price

A small but growing number of firms have identified both the problem and the solution. Pricing capability and sophistication at a firm-wide and individual partner level is being harnessed and for those firms it is having a swift and significant impact. This is one of the key findings from the latest PwC Law Firms' Survey.

The PwC report reveals that the more successful and profitable law firms in the top 100 have identified the fact that pricing sophistication has the potential to help address the needs and concerns of an increasingly discerning and critical client base whilst at the same time, significantly improve margins and profitability notwithstanding continuing downward pricing pressure. Read more...

Data Analytics in Law Firms (Zev Eigen Presentation)

Analytics-word-cloud

From my blog, a post I published at the end of a conference session (unedited from the real time upload):

This is a live blog post from a private large law firm meeting. The presenter is Zev Eigen, Global Director of Data Analytics, at Littler. Zev has practiced in law firms and a law department. He then studied for a Ph.D in data analytics. He joined Littler in 2015. [This is a live post, published as a session ends. Please forgive typos or inaccurate reporting.] Read more...

Companies Pressure Law Firms With Procurement Process

Taking-Money-Out-of-Briefcase

As in-house legal departments look to cut costs and reduce inefficiencies, a process through which law firms submit competitive bids for providing legal services is becoming more mainstream.

Request for Proposals (RFPs) — a process more commonly associated with the procurement of other services — hit a 15-year high in 2015 in the legal industry. According to a BTI Consulting Group survey that was discussed in a Jan. 27 blog post, more than half (56 percent) of corporate counsel respondents said they issued such a request last year. Read more...

Report: cost of top London firms restricting access to justice

Royal-Courts-of-Justice

A report published today by the Centre for Policy Studies argues that the hourly rates charged by top London corporate law firms are so high that they risk restricting access to justice.

According to 'The Price of Law', with the hourly rates for a partner at a top London firm now exceeding £1,000, the costs involved in complying with UK legal procedure may prove prohibitive for some, particularly small businesses. Read more...

Some Lawyers Are Now Charging $1,500 Per Hour

Fishing-For-Business

It's the new rate for the legal elite.

Billing rates of $1,000 per hour used to define the upper echelon of corporate lawyers. But now there may be a new threshold for the über elite: hourly rates of $1,500.

Even with low inflation and low demand for legal services, law firms have raised their rates between 3% and 4% every year since the downturn, nudging some of them into the once-unchartered territory of $1,500 per hour, according to the Wall Street Journal. Read more...

Corporate law firm rates up despite weakening demand

Shark-Lawyer

Documents filed in chapter 11 bankruptcy cases show the hourly fees charged by elite corporate law firms in the US are in some instances well over the $1,000 per hour mark.

A review of filings over the past three months in around two dozen bankruptcy cases shows senior partners routinely charging between $1,200 and $1,300 per hour, with top rates at several large law firms exceeding $1,400. Proskauer Rose's hourly partner billing rate peaks at $1,475, Ropes & Gray's at $1,450 and Kirkland & Ellis' at $1,445. And rates at two firms—Akin Gump Strauss Hauer & Feld and Skadden, Arps, Slate, Meagher & Flom – top out at $1,425. Read more...

12 critical performance indicators in addition to the billable hour

Clock-Money

What gets measured gets improved. Many professional services firms fail to measure critical performance indicators for their business, clients, and staff, and are therefore failing to track the behaviours and strategies which correlate with future financial and strategic success.

It's common for firms to focus only on individual billable hours as a success measure. While on the surface this seems to make commercial sense, it actually drives attitudes and behaviours that are detrimental to the firm's future success. Although fees are important – and relatively easy to interpret – looking at fee generation in isolation can hide or disguise important realities and encourage short-term focus on the single behaviour being measured (fee generation now). Read more...

Will your tender end up in the “too long; didn’t read” pile?

Frustrated-Woman-on-Phone

Will evaluators react to your tender, bid or proposal with TL;DR (too long; didn't read)?

In competitive bid processes, evaluators usually have scores of submissions to wade through. Requests increasingly insist on brevity in responses, often setting word or page limits and other restrictive formats.

Your tender responses are not the place for long and rambling walls of text. Nor are they place to editorialise about the ins and outs of the law or tax regulations. Read more...

The Alphabet Soup of Law Firm Pricing: Alternative Fee Arrangements, Behavior, Cost-Predictability, Demand and Efficiency! (Part 1)

Wrestling-over-money

According to the 2015 Law Firms in Transition Survey prepared by Altman Weil, 2015 began with signs of optimism among law firm leaders. We've seen increases in gross revenues, revenue per lawyer and profits per equity partner, with a third of law firm leaders indicating that demand for legal services has already returned to pre-recession levels in their firms. This is an interesting assessment, but not a surprise. Demand is definitely coming back, but with it will come pricing pressures which could potentially affect revenues, and thus a knee jerk to reduce expenses. Read more...

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