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']
Marketing and BD focus is key to law firm success
Highly successful law firms have greater business development, marketing and technology focus, according to new research.
A number of law firms have been able to notably outperform their peers even though the overall large law firm market is experiencing flat to little growth - by their use of marketing, business development and technology. The report from the Thomson Reuters Legal Executive Institute suggests that investments in areas such as business development, marketing and technology may be a key factor defining the higher-performing firms. The 2017 State of the Legal Market Mid-Year Report identified a population of firms with market-leading growth in overall profits, revenue per lawyer and profit margin, using data from 165 US-based large law firms. The population of higher-performing firms also had above-average growth in demand and fees worked. The findings form part of the discussion at this year's Law Firm Marketing Summit on 7 November 2017 in London. Read more...
Why Law Firms Are Shooting Themselves In The Foot
On the mean streets of Clientsville, Marketplace County, law firms are feeling the heat. Gunslingin' procurement departments holler for "value adds" (gringo speak for "freebies") and grizzled CFOs sip bourbon while calmly instructing their teams to delay invoice payments till the cows come home. And as the sun beats down, the need for hard profit grows. Fast and dirty cyber attacks from raiding gangs can only be fended off using pricey freelance bounty hunters, and those who can't afford a sleek new breed of horse called 'AI' risk grinding to a halt on unforgiving desert highways. Meanwhile, the law firms' very own folk - a dusty but cleaver old gang known as 'The Lawyers' - demand a pretty dollar to keep 'em sweet. It sure is tough in Clientsville, Marketplace County.
Or is it? Are the law firms in fact architects of their own woes? Are they, to stick with the increasingly laboured imagery, shooting like drunken cowboys? The answer, believes Paul Smith, global chairman of Eversheds Sutherland, is yes - to some extent. While acknowledging increasing financial pressures, he thinks problems are mounting because lawyers are not behaving commercially. Read more...
The Decline of Litigation? Part 3
At the outset of this series, I explicitly said that I am not implying that disputes in the world were declining, just that revenue to law firms from the litigation practice would decline.
But it never hurts to ask.
So again our good friends at Thomson Reuters said they might be able to come up with some data on the macro level of disputes and the have done just that. Caveat lector: What follows is not a substitute for exhaustive statistics, but because the result surprised me I have to share it with you. Read more...
As lawyers move into the legal project management space
This is a good check list of how to scope a project, especially when you are working across multiple functions.
Legal Project Management (LPM) is a growing skill set for in-house legal teams. The section highlighted below, is an essential point. The scope and logistics of a project do change and if some cases change often. As an LPM specialist, you have to ensure that you and your project plan are flexible enough to "go with the flow".
Also, remember to hold a detailed debrief at the end of the project as well as an invaluable "lessons learnt" session. Secondly, try and train on the basic tools essential for project management, for example advanced Excel. This is key to running any project effectively. Read more...
Top Three Challenges: Price, Price and Price
The top three challenges facing law firms are all price related (1):
1. Negotiating price with clients (Price)
2. Winning new business (Price is a key element)
3. Competing with other firms (Price is a key element).
When we talk to firms in other professions, we hear the same story. Even in consulting engineering, where the demand side is the strongest in years and resourcing are a challenge, firm leaders tell us there is still big price-down pressure. Read more...
How To Deal With Clients Who Want You To Discount Your Fee
On occasion, prospective clients will ask for (or even demand) a discount. A lot of times they claim they cannot afford you while you notice the luxury purse and their new iPhone. Or they tell you that the lawyer across town is charging less, usually without proof. Or they question the value of your work usually by claiming that all you are doing is “filling out paperwork” or they have a “slam-dunk” case.
I don’t like to give discounts for a number of reasons. Obviously it means less money for me. But it also starts the professional relationship on a bad note. Not only that, you’ll notice that once the discount has been finalized, that’s when the client will tell you additional information that makes their case more difficult to resolve and then holds you to your new fee. And as the case drags on, you will probably pay more attention to higher paying clients or those who are easier to work with. Read more...
Classic: Four lessons in the art of motivating change
Four lessons in the art of motivating change: Lawyers, pigeons and the change journey is by Stephen Poor, now Chairman Emeritus of Seyfarth Shaw. If change management in BigLaw was topical in a few years ago when Stephen wrote this, it’s even more important and pressing now.
In thinking about the challenges of driving change in an industry so resistant to it, I remember a presentation David Maister gave to a room full of lawyers many years ago. One point stuck with me. Read more...
Legal Departments: It’s Time to Show Your Value
General counsel at companies around the globe are doing more than ever before. They must support all functional areas of the business while also making strategic contributions to the growth of the organization. As a GC, how can you turn to your law firms to support you in these efforts? And how can you demonstrate the value of your department to company leaders? To answer both of these questions, we need a common language for defining value.
GCs depend on outside law firms to act as an extension of their teams. However, many GCs face a disconnect between the goals of the company and the actions of outside counsel. There is a communication gap that must be bridged in order to help law firms support business objectives. Read more...
14 percent of law firm billing is not collected, Clio Legal Trends Report says
If you want to get paid faster, get a credit card machine.
That was one of the main takeaways from Clio’s 2017 Legal Trends Report, released on Monday during the first day of its annual Clio Cloud Conference in New Orleans. Taking user data from Clio’s cloud management software, as well as supplemental surveys with clients and lawyers, the report provided new insights, including how attorneys lose money, how clients find an attorney and what factors matter to them when deciding on representation.
The report found that 14 percent of law firm billing is not collected. In 44 percent of cases, clients lack funds to pay, while 31 percent of clients have the money but still pay late. The report also pointed out that 29 percent of firms rely on checks and 25 percent of firms use mail for billing, which slows process time and collections. However, those attorneys who accept credit cards are paid 40 percent faster. Read more...
What Do Lawyers Really Do With Their Time?
No wonder so many lawyers in this country work long hours to meet productivity goals. A recent billing trends report finds lawyers spend only 29 percent of each workday on billable time.
That's only 2.3 hours of billable time for each eight-hour workday, according to the second annual Legal Trends Report, which was prepared and made public today by Clio, a Canadian company that provides cloud-based practice management for firms. The report includes data analysis and also the results of a survey of legal professionals and consumers.
The report, based on data from more than 60,000 paying Clio users that include U.S. firms of all sizes, also found an 82 percent realization rate, which is the percentage of billable hours that are invoiced, and an 86 percent collection rate, which is the percent of billed work that is paid. That means the average lawyer collects only 1.6 hours of billable time from each workday, according to the report. Read more...
Pricing model switch-up pays off for boutique firm
A Western Australia law firm has shaken up its pricing model, creating a bigger drawcard in its approach to retaining clients.
Perth-headquartered law firm, Lynn & Brown Lawyers, says it has become the second firm in Western Australia to move to the Agreed Fixed Pricing model across all areas of practice, abandoning time-based billing firm-wide.
“For over 20 years in Perth, the lawyers at Lynn & Brown have been solving problems for businesses and individuals, where possible they take proactive steps to prevent those problems from ever existing,” said Steven Brown, director at Lynn & Brown Lawyers. Read more...