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']
The International Legal Pricing Academy
nternational legal pricing experts Validatum® and the international trade organization for legal procurement, Buying Legal Council®, have announced a ‘game-changing collaboration’ with the launch of the New York and London headquartered Legal Pricing Academy.
Responding to rapid growth in demand from law firms for senior professionals with demonstrated pricing knowledge, experience, and expertise, the Legal Pricing Academy offers three tiers of Legal Pricing qualification: Certified Legal Pricing Associate, Certified Legal Pricing Specialist, and Certified Legal Pricing Professional.
The professional development pathways will provide pricing, business development, finance and other professionals in law firms who are required to take a pricing leadership role in their firms, with frameworks for pricing innovation, pricing governance, academic and practical knowledge and skills, increased recognition of the importance and status of legal pricing professionals, and competitive employment advantage. Read more...
Want A Market-Sized Bonus? Better Be Ready To Bill Your Butt Off At This Biglaw Firm
Billing 2,400 hours over the course of a year is a lot. Indeed, at Quinn Emanuel, hitting that billing threshold qualifies you for some extra money on top of the market bonuses. So if a firm introduces a new bonus structure and you need to bill 2,400 hours to get the same money that Cravath gives out without any billable requirement at all, well, Above the Law is going to have something to say about it.
Tipsters inform us that Venable recently announced an updated bonus structure. The scale is available in full below, and, as you can see, it isn’t until the 2,400 mark that associates at the firm finally match the Cravath scale. Read more...
QNBT: Extracting Real Value from Non-Billable Time
“Your billable time is your income; your non-billable time is your future.” – David Maister
Non-billable time gets little respect*
Many perceive non-billable time as something that can be conjured at will. Taking someone to dinner who may or may not be a qualified client prospect can be recorded as business development. Furthermore, that two-hour dinner can turn into three or four and, with travel time, five hours. Those who have spent many hours on gruelling and challenging legal work can easily resent the generation of these hours with so little effort.
The consequence: Non-billable time is often not tracked accurately. Read more...
Using AI for Time-Entry Analytics to Support Pricing Functions
The climate of change in legal has given rise to a few cliché phrases du jour. Rhetoric surrounding the evil “robot lawyer” and its relentless siege against the sacred traditional methods of legal practice ranks second on my list of least favorite sensationalistic exaggerations, following only the “death of the billable hour” proclamation and predictions about whether this year will be the year of its demise.
While the image of a terminator-like counselor is indeed intriguing, the reality is that technology is slowly but surely permeating into various facets of the legal services industry. Whether it be quicker, more accurate means of performing research or drafting documents, or more powerful ways of analyzing and leveraging data to inform management decisions, technology is finally finding its way into the operations of legal services firms. Read more...
Time-based billing helps firms be more profitable
Despite movement away from billable hours from segments of the legal profession, new research has indicated that law firms that bill at least half of their work by the hour continue to show higher profitability.
‘The Pitcher Partners 2019 Legal Firm Survey’, conducted by national independent firms association Pitcher Partners, sought responses from 140 ‘mid-market firms’, and found that hourly rates still comprise 58 per cent of invoices, while fixed rates represented 29 per cent, and just six per cent of fees were done by value-based pricing.
But only a quarter of the firms surveyed said that they track profitability at the client level, and those firms that did not track employee time at all reported having the lowest levels of profitability of those surveyed. Read more...
Billable-Hour Model Hurts Women's Careers, Say Female Lawyers
On this International Women's Day, female lawyers say the billable hours model is stifling careers and penalising their gender.
The billable-hour model has been placed under a lot of scrutiny in recent years, with many clients and some law firms looking to move away from the traditional model in favour of alternative flat-fee arrangements.
But with the vast majority of firms still relying on billed hours to invoice their clients or just to measure internal performance, the verdict from some women in the City is that the model doesn’t work as well for their careers as it does for men’s. Read more...
LEGAL PROJECT MANAGEMENT
Why practising lawyers should cede more operational control to legal project managers
The recent survey conducted by the International Institute of Legal Project Management (IILPM) confirms that practising lawyers are wary of ceding more operational control to legal project managers.
A degree of caution is understandable. After all the lead lawyer on a matter is ultimately responsible for legal service delivery and client satisfaction.
There is a problem however should caution turn into something more. Hindering legal project managers from fulfilling their role properly is not good for anyone. Read more...
Creative Price Negotiation
Most lawyers struggle with negotiating price with prospects and clients. Part of this is the product of lawyers’ personality type, which is generally conflict-averse. Often, lawyers fear that inartful price discussions could cause them to overplay their hand and lose the business. However, the biggest negotiation roadblock comes from having a singular focus on money.
The Role of Money
Money is a factor, but it’s rarely the defining one in any consideration. Surveys consistently show that it isn’t the No. 1 factor in taking or remaining at a job, and it’s not the No. 1 factor in most “considered” purchases. Whether we’re talking about salary or purchase price, as long as the money is in the right vicinity, other, nonfinancial, considerations make a big difference. Read more...
Legally sound procurement: how to add legal value to the purchase of goods and services
A simple but revolutionary change in the process of negotiating procurement contracts can dramatically improve a buyer's position. Getting legal experts involved right from the beginning saves time, allows for a better assessment of proposals, and may lead to more favorable contract terms. Above all, it ensures fully informed decisions.
In the 2017 film Darkest Hour, Winston Churchill scolds his war council, whose advice was to seek peace with Hitler, by saying, "You cannot reason with a tiger when your head is in its mouth." While the procurement process may not be as dangerous as World War II, pressing a supplier on contractual terms after the winning bid has already been accepted puts procurement managers in a risky position similar to the one Churchill described. As the U.K. prime minister knew, that approach rarely turns out satisfactorily. Read more...