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']
Pricing and Salivating Dogs
This is not the first time that we have written on this topic but two items that crossed our desk in the last week have galvanised us into raising the topic again. The first was an article appearing in The American Lawyer’s Am Law Daily that looked at some of the reasons contributing to the demise of King & Wood Mallesons.
Most of us are familiar with Pavlov’s classical conditioning experiments. It is therefore obvious to most that the best way to get the behaviour you want is to provide reward for doing so, or at least refrain from punishing people for it. The flip side is that you must make sure you’re not inadvertently providing reward for behaviours you’re trying to discourage. Read more...
THE BIG FOUR
Should BigLaw firms worry about increasing competition from the Big Four accounting firms?
Jami McKeon says she’s not worried.
Elected chair of Morgan, Lewis & Bockius in 2014, McKeon has been with the legal giant since 1981 and she’s seen plenty of rivals, competitors and existential threats to the legal industry come and go. “The legal market has always been highly competitive,” she says, “so changes we see today are more about the source of competition.”
Law firm consultants, however, tell a different story. According to ALM Intelligence and Altman Weil, law firm leaders are already losing business to this latest source of competition that McKeon is speaking about—and many more are concerned that this could be just the tip of the iceberg. Read more...
Biglaw Firms Stink At Serving Smaller Clients
The high rates charged by larger law firms can prevent them from sufficiently serving smaller clients.
Biglaw firms are great at handling bigger cases and transactional matters. Indeed, Biglaw firms can devote many attorneys to a particular case, and can deploy other resources to assist corporate clients successfully manage complicated matters. The services Biglaw firms provide do not come cheap, and this is why Biglaw firms typically serve massive companies and individuals with deep pockets. Read more...
Lawyers have become accustomed to billing by the hour: after all, “it’s the way we’ve always done things”. Or is it?
Truth be told, billing by the hour is a relatively modern ‘invention’ largely attributed to Reginald Herber Smith who by 1940 in his US firm Hale and Dorr, was using one-tenth of an hour to track activities on legal matters. The purpose of the timesheet back then was to measure internal metrics for matter planning and budgeting. It wasn’t until the late 70s billing by the hour was recognised as the industry norm around the world. Read more...
Barclays Looks to Shake Up Law Firm Panel Model in Coming Years
Beginning in 2021, Barclays will ditch RFPs and adopt a more flexible approach to outside counsel management.
One of the world’s most prominent banks has a plan to move away from traditional law firm panel processes.
The goal? Create a more dynamic panel structure that builds deeper relationships and allows the bank to “flex” firms’ coverage. Read more...
The Expanding Impact of Legal Procurement
Ari Kaplan went to the Buying Legal Council’s 2018 Legal Procurement Conference and found remarkable alignment of procurement and the provision of legal services.
Six years ago, I wrote an article for Law.com called “Procurement Process Embraces Legal Services” and concluded that “procurement professionals have become much more active and influential within their corporate legal departments because the general counsel is under tremendous pressure to reduce costs in the economic downturn.” While chief legal officers still bear that weight, the conversation around law department management is a much richer one, as evidenced by the themes of innovation, value, client service, and transparency, which the Buying Legal Council’s 2018 Legal Procurement Conference showcased on September 5 and 6. Read more...
The General Counsel’s Guide to Legal Procurement
In a bid to deliver an agile, responsive legal service, General Counsel around the world are increasingly turning to legal operations and legal procurement professionals to help source and engage professional legal services.
Having realised procurement and legal ops can help deliver more than just cost savings, in-house teams are embracing data, developing KPIs and exploring legal technology designed to streamline and strengthen their relationship with external counsel. And the benefits speak for themselves. Read more...
Building the Pricing Machine (Part 1): In the Deep End
At what point does drinking from a firehose begin to feel normal?
After a year, it’s probably closer to reality than I’m comfortable admitting. It’s a good thing I’m thirsty.
In my first year at Fredrikson & Byron, my role has changed somewhat from strictly learning to now rolling my sleeves up and getting my hands on some really interesting projects. One advantage I had in getting up and running was the timing of my on-boarding. The firm had already laid the groundwork of a pricing function, and a number of lawyers were already accustomed to teaming with a pricing professional. Additionally, I arrived just in time to take part in all of the meetings for setting rates this year; I went to a legal pricing master class just a month after starting on the job (where I met and learned from several peers at other firms); and clients continued to ask our lawyers for estimates, budgets, and AFAs. Read more...
Design Thinking Is Fundamentally Conservative and Preserves the Status Quo
When it comes to design thinking, the bloom is off the rose. Billed as a set of tools for innovation, design thinking has been enthusiastically and, to some extent, uncritically adopted by firms and universities alike as an approach for the development of innovative solutions to complex problems. But skepticism about design thinking has now begun to seep out onto the pages of business magazines and educational publications.
The criticisms are several: that design thinking is poorly defined; that the case for its use relies more on anecdotes than data; that it is little more than basic commonsense, repackaged and then marketed for a hefty consulting fee. As some of these design thinking concepts have sloshed into the world of policy, and social change efforts have been re-cast as social innovation, the queasiness around the approach has also begun to surface in the field of public policy. Read more...