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']
Burcher Jennings enters the accountancy profession
Accountancy firms are increasingly finding themselves being challenged on hourly billing and other inflexible and outdated pricing models, according to international pricing guru Richard Burcher. Burcher Jennings are being approached by accountancy firms keen to learn lessons drawn from similar disruption to age-old and increasingly discredited pricing models.
Richard Burcher, Chairman of Burcher Jennings, who regularly advises global law firm leadership teams on pricing and is now being approached by accountancy firms seeking his advice, says: Read more...
What's A Lawyer Worth?
‘What’s a lawyer worth?’ is a serious question that could also launch a stand-up routine. In a free market economy, compensation is generally linked to the value of the service; supply and demand; complexity/specialization; and urgency/available resources. Law has operated as a guild– not a competitive market—until recently. And that is the seminal reason why lawyers are so expensive.
Technology, the global financial crisis, and globalization have changed the buy/sell dynamic across multiple industries—law included. The legal guild no longer operates as an independent island ruled by lawyers. Consumers recognize that: (1) law is both a profession and business; (2) legal practice is no longer synonymous with legal delivery; (3) lawyers simultaneously represent two clients: the one that retains them and society at large; and (4) law has a distribution problem described by Derek Bok, a lawyer and former president of Harvard, as “far too much law for those who can afford it and far too little for those who cannot.” The legal industry is experiencing unprecedented change because consumers—not lawyers—are now driving the bus. Read more...
Six things modern GCs really want from their law firms
The role of the modern General Counsel is broader and, arguably, more challenging than ever before. The GC is the principal legal advisor to the client company, frequently chief compliance and risk officer, leader of the legal department and function, executive team member and general commercial advisor, as well as coach, mentor and counsellor.
Today’s GCs, regardless of the size of the law department, are constantly looking for ways to improve department performance, deliver even better legal services, find cost efficiencies and liberate staff time to spend on strategic, value-add or personal growth and development projects. It is therefore timely to examine what might help a modern GC in these efforts in a series of articles, starting with six things modern GCs want from their law firms. Read more...
How Can You Tell If the RFP Is Pre-Determined?
We all know that when procurement professionals purchase anything they need to get three bids. So why should we think that request for proposals (RFPs) for legal services are any different? I have admonished lawyers not to take the time writing a proposal when I see tell-tale signs that it is a pre-determined bid. I can recall several instances where I thought we might be the stalking horse — and I was right.
In one instance, the RFP was so poorly written I knew something was up. However, we went to the briefing meeting anyway and I noticed that the presenter seemed to favor a certain lawyer in the audience. At the kick-off meeting I told the partners that I thought the bid was very likely pre-determined. Nevertheless, they wanted to proceed because it would be a prestigious client. I acknowledged that you never know what will happen but that if we wanted to craft a proposal, we needed to pull out all the stops and present a great one. Read more...
Atlanta Sees Slow Rise in Billing Rates as Biggest Firms Pull Ahead
Hourly billing rates rose modestly for large law firms in Atlanta this year, narrowly beating a nationwide average increase of just under 4 percent. But in line with industry trends, the biggest, most profitable firms are driving much of that growth.
That’s according to national surveys of large firms for the first nine months of the year conducted by Wells Fargo Private Bank and Citi Private Bank’s law firm groups.
“I feel Atlanta—outside of the largest, most profitable firms—is under the same rate pressure that we’re seeing across the country,” said Jeff Grossman, senior director of banking for Wells Fargo Private Bank. Read more...
Fighting for law firm dollars
Some firms continue to de-equitize partners in order to become more profitable. After associates’ pay, support staff salaries and rent have long been two of the biggest overhead costs. Over the past five years the ratio of lawyers to assistants has increased from 2:1 to 4:1 and higher. Many firms are also cutting back on office space and opting for alternative arrangements, such as hoteling and working from home.
Continued centralization of many standard law firm business functions is entirely possible. We’ve already seen this trend in finance, human resources, IT and, in some cases, offshoring traditional legal work to lower-cost service providers. Read more...
How lawyers benefit from legal project management
While, as a generalization, matters are well managed, there are many possible improvements in workflow management at the start, during and on completion of every matter.
LPM defined. Making explicit what was implicit before the introduction of formal LPM is the structured preparation, execution, and evaluation of a matter based on the clients’ requirements. The concept provides tools for planning, the offer and the execution of the assignment. After the presentation and client acceptance, the matter is executed according to the guidelines that are agreed in advance. LPM provides tools for reporting deviations and making adjustments in consultation with the client. Where necessary, modifications are made. Read more...
Lower Revenue? Lower Utilization? Watch out BigLaw — You Might Be Doing Something Right
The erosion of overall demand for legal services has been well documented. It’s not a temporary blip; it’s a trend. The 2017 Law Firms in Transition, An Altman Weil Flash Survey calls the decrease in demand “a disease.” And at first glance, this trend may indeed look like an illness; after all, in most firms decreased demand means decreased revenue, right? Well, that can’t be good.
The symptoms of the “ailment” are common and evident:
- Companies are pulling more and more work in-house. Read more...
Buildup of Alternative Fee Deals Doesn't Pan Out, Midsize Firm Leaders Say
"Clients tend to revert to the safety and comfort of the billable hour," said Chris Parker, who runs the Atlanta office of 124-lawyer Miller & Martin.
A common topic at any conference of lawyers over the past decade has been the alternative fee arrangement that promised predictable legal costs for clients and less onerous timekeeping by lawyers.
But folks at some midsize firms around Atlanta say the idea has never matched the hype. Read more...
Reflections of a GC
In the spirit of generosity, which I hope is an active presence in your life but which is conspicuously abroad at this time of year, a regular reader granted me permission to share some of his reflections prompted by the recent column, “The End of Leverage?”. I have very gently anonymized it for self-evident reasons, but I hope it gives readers a chance to reflect on whether they recognize themselves in what follows.
Merry Christmas, everyone!
Hope all is well. Long-time reader/fan of your site (first as a Vault 100 associate, and now as an in-house AGC), and we’ve exchanged several e-mails over the years. As I read through your “End of Leverage” post (which is fantastic, as always), I wanted to chime in with another data point on #1. I know you mentioned that many in-house departments push back through billing guidelines that mandate, e.g., no first-year associates. While we do have billing guidelines, over the years we’ve relied on them less and moved more towards a “trusted partner”-type model.