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 First 90 Days As Pricing Director: How to Hit the Ground Running
It is hard to overstate the importance of starting well: The opening words of a speech, the early lines of a novel, the first few bars of a song….
As an audience, a promising start gets our immediate buy in, creating a wave of positive expectation as we react to the feeling that we are in good hands. We sit up, read more closely, turn up the volume. In short, we focus our attention, caught up in the anticipation of good things to come.
Get it wrong at the start though and you’ve lost us: we drift off, shut the book, cut the volume. These days we don’t have the time to expend on things that don’t offer promise. Read more...
Bidding for public sector work: nobody said it was easy
Greetings and welcome to my first blog post as an Associate with Validatum. An introductory word: I tend to write as I speak. This is a good/bad thing (see?). The odd song lyric will crop up from time to time. Hopefully you will grow to like it. I may even expand your musical horizons whilst blogging about the procurement of legal services. Come to think of it, I may have just found my USP…
For example, when thinking about the trials and tribulations of bidding for these contracts, I am reminded of the words of Chris Martin of Coldplay: “… nobody said it was easy; no one ever said it would be this hard …”. A perceptive man indeed.
The subject of bidding for public sector work cannot be covered in a blog. This snippet is designed to merely highlight some of the problems you’ll face and give you some tips on overcoming them. Read more...
What Do Your Clients Want? Ask Your New Friends in Legal Procurement
An increasing number of companies today involve procurement when selecting outside counsel and ancillary legal services providers. This is particularly true for companies with significant legal spend and in regulated industries; banks, insurances and pharmaceutical companies were among the first to bring in procurement professionals. Now, many Fortune 500 companies and international equivalents bring in legal procurement to support the legal department cut costs, ensure quality and drive efficiency in legal services.
To better understand legal procurement practices and detect trends, the Buying Legal Council®conducted a survey in January 2016. This research represents the view of 92 legal procurement and legal operations professionals. Read more...
The evolution of project managers in law
Professor Richard Susskind will be delivering the 25th Annual Lecture of the Society for Computers in Law in London on 6th October. Richard will be assessing predictions made in his book The Future of Law, published 20 years ago. He will also be making some further predictions about the future of law and IT.
I will be going to the lecture, as it is always interesting to hear what Richard has to say. News of the lecture prompted me to pull down my copy of the Future of Law from my bookshelf, to remind myself what it said about project management.
The Future of Law briefly touched upon the role of project management when delivering legal IT systems (see p235). After listing some key project management principles (budgeting, planning and resource management) Richard called for legal IT projects to be led by project managers. Read more...
LexisNexis Bellwether report on value: The client-lawyer disconnect and fixed fees
There is still a significant disconnect between lawyers and their clients when it comes to their perception of value, a survey out today (10 October) reveals, with only a minority of law firms also having shifted away from the billable hour despite seeing great opportunity in fixed fees.
LexisNexis UK’s The Bellwether Report: A Question of Value survey, which canvassed the opinion of 122 lawyers and 108 clients from across the sector, finds that 30% of lawyers think they offer “excellent value for money” but only 8% of clients agree.
The survey also finds that 43% of lawyers see fixed fees as an opportunity but only 23% of firms have shifted towards that billing model in the past year. Read more...
Howard Kennedy to block computers of lawyers who don't meet target
London-based law firm Howard Kennedy has introduced a penalty system in which lawyers - including partners - who fail to clock up seven hours of work per day will have their computers blocked.
Fee-earners must average at least 5.6 billable hours each day (80 per cent of their seven-hour daily target), with those who fail to hit this average over any given working week sent an email reminder. If the target isn’t met over a period of one month, the firm will block the lawyer’s computer.
Howard Kennedy’s real estate chairman Julian Hindmarsh told The Lawyer that the system is designed to ‘shame’ lawyers who are — as result of poor timekeeping — forced to have their computer unlocked before they can continue with their work. Read more...
Making the effort count: How UK and US firms compare in winning pitches
Our recent research into RFPs showed that law firms are getting better at winning pitches, but which firms enjoy the highest conversion rates? And why? We delve into the detail...
All law firms are improving the way they respond to request for proposals (RFPs) but UK firms may currently have the edge over US firms in terms of converting bids into new work. This is according to findings from a survey carried out in the early summer by Totum and US recruitment firm J. Johnson Executive Search.
In our previous article, we highlighted the findings of the survey in relation to the UK firms polled. In this piece, we take this further, comparing the responses we received from both UK and US firms, to ascertain how the similarities or differences in their approaches impact bid success rates. Read more...
Winning Strategies For Responding To Legal RFP's
Chances are pretty good that if a law firm received a Request for Proposal (RFP) from a company procurement group or an in house legal department, someone at that company liked enough about the firm to want to include it in their competitive selection process.
Given the importance of winning new or more legal work, or landing a position as designated counsel for a potential client, RFP’s should always be taken seriously by any firm receiving one and should not be ignored.
Failure to respond to an RFP sends a clear (negative) message to the client that the firm doesn't care about their considerations or wanting to represent them. Read more...
Think higher billing rates are the key to higher law firm revenue? Think again, report says
Law firms that raised billing rates at a slower pace in recent years tended to have higher demand from clients and higher revenue growth, according to a new study.
The Peer Monitor report by Thomson Reuters came to that conclusion by looking at data for the nation’s top 100 law firms, the nation’s second hundred largest law firms, and midsize firms, according to this summary. The Am Law Daily (sub. req.) covered the findings.
The report (PDF) noted that midsize firms have trimmed their rate increases over the past three years—from 2.5 percent in the first six months of 2014 to only 2.1 percent in the same period in 2016—yet average demand “climbed steadily.” Read more...
The Best Pricing Advice I Ever Received
So it was the summer of 1983, and I had reached that particular stage of adolescence when your parents have finally managed, after a long succession of hints, to get across the idea that this would be a good time to secure gainful summer employment.
And so off I went to the local employment office to check out the job board, and it turned out that when you’re 15 years old, there’s actually not a whole lot you’re qualified to do, which always comes as a mild surprise to your burgeoning teenage ego.
For people of my age and utter lack of qualifications, however, there was the “Odd Job Squad,” which allowed you to paint fences or rake leaves or weed gardens or do some other task where you can’t break anything that can’t be inexpensively replaced. Read more...
How Billable Hours Changed the Legal Profession
1975 The Supreme Court rules in Goldfarb vs. Virginia State Bar that “minimum-fee schedules” used to set lawyer rates violate federal antitrust law.
In the law business, no institution rivals the billable hour in the generation of large-firm partner wealth—or associate misery. The system of multiplying hours (allegedly) worked by a (dismayingly high) rate “rewards unproductive behavior, invites abuse, and pits attorneys’ financial self-interest against their clients’ goals,” says Steven Harper, a former partner at Chicago-based Kirkland & Ellis who now blogs at the Belly of the Beast.
For partners of large corporate firms, the billable hour functions like a cash printing press. That’s because of the magic of “leverage”: Partners employ armies of associates whom they compensate at levels far below the associates’ billable rates. Read more...
Prelude to Successful Legal Process Management
In the rapidly transforming legal industry, legal process management (LPM) is not just a trendy buzzword. Experts have been touting the merits of LPM for several years and the movement has now firmly taken root in an effort to improve the efficiency and effectiveness of legal services.
Legal departments are implementing internal process management strategies and driving outside counsel to adopt LPM principles to ensure that top-flight legal services are delivered within budget in a timely manner. Progressive law firm leaders have embraced LPM and see how process management principles can be intelligently applied to the practice of law. Simply put, LPM makes sense. Clients can realize greater value and results from their legal spend. Law firms can operate more efficiently and more profitably with greater client attraction, retention and satisfaction.
For lawyers who are just becoming conversant with LPM, rest assured that successful LPM efforts will not result in “Robot Law” and will not give rise to the machine lawyer. When intelligently implemented, LPM is simply a process change initiative that analyzes, structures and augments the way legal professionals tackle legal work and manage and deliver legal services. Read more...
Straight talk between corporate clients and their law firms: Inaction has consequences
In today’s post on The Dialogue, Ralph Baxter writes about a significant conversation that occurred at a ground-breaking BigLaw forum in San Francisco recently. The occasion was the first annual institute of a prominent new organization, the Corporate Legal Operations Consortium. The conversation was about the importance of straight talk between corporate clients and their law firms about the imperative for change.
The conversation sparked headlines in the legal trades and lots of activity on Twitter. As a participant in the conversation, I want to provide more detail about its context and content. I also want to emphasize the importance of the forum in which it occurred.
The conversation occurred at the first annual Corporate Legal Operations Institute (CLOC). The Institute was important for a number of reasons. Here are two: Read more...
Profits hit at top 100 firms – survey
Profit margins are being squeezed at the top 100 firms by pricing pressures, pay rises and a decline in productivity, according to a respected annual bellwether published today.
PwC’s 25th annual Law Firms Survey also reports that 75% of the top 100 reported revenue growth this year, down on the 82% recorded in 2015.
Spare capacity is now an issue, the report states, after firms staffed up last year in anticipation of a continuing improvement in market conditions. Read more...
Law Firm Profitability: Can It Be Measured By Hours?
I recently had a conversation with one of my clients, a law firm managing partner, about profitability. He had attended a seminar put on by a management consultant who talked about profitability and the use of alternative or fixed fees, claiming that in order to determine whether a particular matter was profitable, the firm should keep track of time spent on that matter, multiply that by the hourly rate of the attorney(s) doing the work, and then compare that amount to the amount of the fixed fee received on that matter.
Unfortunately, this is how many lawyers try to determine whether they should use fixed fees and whether those matters are profitable. But in my view (and thankfully, in my client's), this approach is all wrong for a number of reasons: Read more...
Consumers ‘confused’ over cost of legal services, research finds
Forcing firms to publish price information will not help clients make informed choices, argues Law Society
The vast majority of consumers do not understand the price of common legal services and may not be seeking legal assistance as a result, new research has found.
Research from the Law Superstore has today that just 9 per cent of consumers are confident they understand the price of common legal services, such as conveyancing, divorce, wills and probate, leading to an overestimation of up to double the actual price. Read more...