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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.

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Seasons greetings

Xmas-cartoon

This is our last Validatum Pricing Espresso® for 2015.

To all our friends and colleagues around the world, we extend our grateful thanks for all your support and collegiality over the year. It has been an honour.

Warmest wishes for precious time with family and friends. Let's remember what is important and what isn't. Enjoy a well earned break.

'Trophy' Clients: Essential or Essentially A Pricing Pain in the @%$#

Number-1

When working with partners on pricing strategy, an exercise that involves amongst other things, pricing client files that are active at that time, some of our pricing suggestions can be greeted with, "oh, I can't do that, this is one of my good clients!"

Really? And what exactly is a good client pray tell? More specifically, why have you endowed this client with the mantle? We are then presented with one or more of the following: Read more...

Common sense prevails: Appeal decision protects solicitor offering ‘unbundled’ advice

Jackson-LJ

Solicitors instructed on a limited retainer do not have a broader duty of care to their clients, the Court of Appeal has ruled, asserting the importance of ensuring that lawyers can offer unbundled services.

The ruling came in Minkin v Lesley Landsberg, a case in which a client claimed that her lawyer was negligent in the advice she gave during divorce proceedings.

The case centred on the extent of a solicitor's duty to their client when they are instructed on a limited retainer. Read more...

Some thoughts on fair, reasonable, and proportionate legal fees…

Monopoly-Money

In the wide-ranging and ever-growing discussion of Alternative Fee Arrangements the basic requirement for most small-medium firms of fair and reasonable fees can tend to get a bit lost.

There are plenty of good reasons for law firms to move beyond simply charging by the hour for legal services. Applied inappropriately, the method can lead to costs that are not fair and reasonable to the client. Strictly applied, the method can restrict you to charging a fee that is much lower than a fair, reasonable and proportionate fee in the particular circumstances. Read more...

Profit growth greatest for small firms

Graphs-Charts

Small firms achieved significant growth over FY15, while large and mid-sized firms held their ground, according to a new report.

Macquarie's 2015 Legal Benchmarking Results report showed that one in every two firms surveyed increased profits in 2015, down from 57 per cent in 2013.

The average increase across all firms was 10 per cent. Small firms achieved the largest increases, with an average of 14 per cent. Large firms grew their profits by five per cent, while mid-size firms held steady at two per cent growth. Read more...

Big Data: Steady but Subtle Increase in AFAs Use

AFA-Graph

Subtle but steady – that's what the data has to say about alternative fee arrangements (AFAs) – according to Kris Satkunas writing for InsideCounsel: AFAs rising: Data shows subtle but steady increase in non-traditional billing.

The study reveals the overall number of legal departments actively engaging in AFAs grew sharply, to the tune of 76 percent, up from 59 percent in the previous year. The data, which stems from the latestCounselLink® ELM Trends Report, indicates AFA usage grew in five core law practice areas: Read more...

What does the future hold for third-party litigation funding?

Currency-keyboard-symbols

The American Lawyer magazine recently headlined a story suggesting that Juridica, a Guernsey-based litigation funder which mainly funds US cases but is headed by English barrister Lord Brennan, was halting investment in any new cases with a view to managing its existing portfolio. The news, the magazine says, follows a number of losing 'bets' by the group and resultant pressure from shareholders.

Is this a dose of reality for funders, reminding them that litigation is a risky business, and will it lead to a pull back from the burgeoning market for third-party funding? Have funders rushed in and had their fingers burnt? Read more...

How To Leave Fees on the Table: 21 Things I Must Ignore

Jigsaw-Pound

The two primary objectives of all pricing decisions by law firms should be to maximise profitability while at the same time ensuring that the pricing structure leaves the client feeling that they have had fair value for money. And yet opportunities to do so continue to be squandered.

There are many reasons for this but the most perplexing is the failure to apply pricing factors that have been available to lawyers in many countries for decades. Read more...

The Rise of the Legal Industry’s Project Management Office

Project-Management-Montage

When it comes to tackling large scale technology projects, corporations have long relied on their project management offices. In fact, this function has become so ubiquitous in the corporate world that it is commonly known by its acronym – PMO. Until recently, not many law firms and corporate legal departments had established formal PMOs functioning outside of their IT Departments. But this is rapidly changing. Read more...

Procurement: Friend or Foe?

Budget-Cut

When Richard Burcher and I first met at a breakfast seminar on legal pricing, he had no idea I was a procurement professional managing legal services provision. I'd gone along to the session aimed at GCs to see what the 'other side' (Richard) thought, and when the questions turned to the role of procurement in the firm-client relationship, I was somewhat dismayed to find that Richard and several of the GCs present weren't exactly extoling the virtues of my profession…

After several minutes of 'strategies to manage unreasonable procurement teams', I could no longer sit quietly, and with barely disguised outrage launched into a rather passionate monologue on how unreasonable procurement teams were not the cause of client/firm relationship issues, and that we had an important role to play in that triumvirate. Read more...

The Perils of Profitability… And Thoughts on Best Practices (Final Thoughts… For Now)

Clock-Money

In my last two posts, "The Perils of Profitability… And Thoughts on Best Practices," and its follow-up, "Second Thoughts," I discussed the need for and challenges associated with profitability assessments in law firms. In this final post on this topic (for now), I wanted to address a more strategic, or perhaps philosophical topic: Do we really need to rethink what we mean by "profitability" in this profession?

In the first post noted above, I wrote: Profit, properly measured, is not what the industry defines "profit" to be – everything paid to the partners. Rather, no matter how you measure it, the profit of the firm is what's left over after you pay all the costs of the firm, including paying the partners for the real value their work contributes (not just the client billings directly, but other personal services including rainmaking, management and everything else the partner contributes.) Profit measured that way would be very different than what the industry labels as profit, and for a significant number of firms may actually be negative. Read more...

The Anatomy of the Billable Hour

Clock

The "billable hour" seems like an everlasting topic in the legal industry. It is a center of many discussions between legal pricing experts. Even more so with the rise of the alternative fee arrangements (AFAs). After big interest in the comprehensive AFAs article, we provide you the opposite side of the coin. We bring you the coverage on the hourly based pricing. It is a long-standing approach still popular with many.

The hourly rate debate has two opposite sides. On the one side are the supporters of the billable hour. On the other side are the professionals who think the billable hour will become extinct. Why? Because of new pricing models lawyers incorporate nowadays. Read more...

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