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 Self-Assessment Health Check
Most firms now recognise that pricing strategy and execution requires considerably more focus and effort than has historically been the case. But as with any initiative, the starting point should be a critical appraisal of how we are doing currently. Only by taking a candid and honest view of the current state of affairs do we have a basis for deciding what is required to make improvements and how to prioritise those efforts.
There is often a temptation to over engineer this aspect of the initial analysis. Certainly, there are advantages to a comprehensive research project but for many, a useful starting point and in fact all that may be required is a subjective self-assessment based on a series of questions, the answers to which will give you a strong steer as to how you are currently doing. Read more...
LEGAL PROJECT MANAGEMENT
Where to implement legal project management?
The benefits of applying legal project management (LPM) successfully are well known and include things such as:
- improved scoping, which in turn results in better estimates of cost and effort required to deliver legal work;
- better management of legal matters once they are underway and
- improved communications with clients and third parties.
Little wonder there has been something of a mini-boom in the recruitment of legal project managers during the last year or so. Moreover this recruitment is not confined to law firms. It is becoming more common to see a range of operations staff, including legal project managers, engaged by in-house legal departments. Read more...
How should you start implementing legal project management?
You are asked to be the operational lead for implementing legal project management in your law firm or department. How should you make a start?
Ultimately, successful implementation depends on many factors, some of which will be out of your control.
However, the more you can control the better. Working effectively with colleagues, especially your project sponsor, should also help enormously. Read more...
Legal Education: a place for legal project management?
How can law schools prepare their students for the changing demands and expectations of a 21st century career?
This is the question raised in this guest post by Chris Marshall, Director of Knowledge Economy at the Hillary Rodham Clinton School of Law, Swansea University.
New skills required of law graduates
It is increasingly clear that a traditional law degree may not in the future be sufficient to equip graduates with the skills necessary to meet the changing nature of legal practice. Read more...
Legal Project Management is A Force For Change
Project management has seen significant growth in the legal sector in just a few years. But as with anything that catches on quickly, law firms sometimes ask us whether it is now a permanent feature of law or another ‘latest trend’ that will settle or maybe even peter out in time.
In our view, however, this is one skill-set that is here to stay. Clients are becoming increasingly demanding in terms of their expectations of the firms they engage for legal services. New and changing requirements in terms of price and level of service naturally leads to a need for firmer control in terms of how legal matters are managed. This is especially the case with cross-border matters, which tend to be highly complex, requiring the management/coordination of many strands and resources across multiple jurisdictions. Read more...
The Billable Hour: Can Lawyers Learn from Consultants?
The legal industry now faces similar pressures from clients on billing models that the consulting industry previously confronted.
Buyers of professional services and products are seeking more clarity, control and predictability in their relationship with providers. This pressure is present across all professional service sectors, opening the door for innovative firms to grab market share from those that are slow or resistant to change. Read more...
Should There Be A Requiem For The Billable Hour?
It’s up to us to figure out how best to provide legal services so that clients feel that they are getting value for what they pay.
I’ve been thinking a lot about the billable hour and how some people are trying to drive a stake through its heart, while others champion the continued use of the billable hour from now until whenever. When I was in private practice, I hated having to keep written time sheets (in dinosaur days) and now there are better, smarter ways to capture time.
Not having to keep time is a real sales clincher for going in-house, at least it was for me. I know, I know, some corporate legal departments keep time records, but we never did. Since we didn’t, clients were never fearful of being billed for time spent talking with an in-house attorney. Preventive law at its best. Read more...
Judge pares costs over £900-an-hour lawyers' fees
The High Court has significantly reduced a party’s legal costs after ruling that high earners were unnecessarily engaged. In Dana Gas PJSC v Dana Gas Sukuk Ltd & Ors, Lord Justice Leggatt said the £1.47m bill submitted for work on two sets of proceedings was ‘obviously unsustainable’.
Investment management firm BlackRock had been added to the action as a defendant and contested the shareholder claim at a trial on a preliminary issue of law. Those proceedings involved a two-day hearing last September and three further court appearances.
After succeeding on the preliminary issue, which was not specified in the costs judgment, BlackRock faced a three-day hearing where the claimant made several new applications to the court – all unsuccessful. Read more...
Trainees billing £282 an hour – US firm will not recover “eye-watering” costs in full
There is no chance of a leading US firm recovering anything like fees that range from £946 an hour for a partner to £282 for a trainee, when competent representation for half that amount is available, a Court of Appeal judge has ruled.
Lord Justice Leggatt was dealing with an application for payment on account of costs by a client of Weil Gotshal & Manges and complained about the difficulty of estimating recoverable costs when the overall amount claimed was “so obviously unsustainable”.
This was not the same as saying they were not value for money for the client, however. Read more...
Determining the Reasonableness of Block Billing and Expenses
When determining the reasonableness of attorneys’ fees within a block billed line item, the Court looks to how detailed the line item description is and whether time billed can be deemed reasonable. When determining if an expense line item is to be included within “reasonable attorneys’ fees,” the Court has to decide if an expense is necessary to the prosecution or defense of the case. The case of U.S. Welding, Inc. v. TECSYS, Inc., 2017 WL 4334009 (D. Colo. Sept. 8, 2017), illustrates the significant importance of detailed billing.
The Court found that a line item that included drafting a brief, reviewing instructions, a telephone conference, and correspondence with opposing counsel, which amounted to 11.4 hours, contained enough detail to permit an assessment that the tasks performed were reasonable; therefore, no deduction was taken. The Court also weighed in on the reasonableness of fees associated with unsuccessful litigation strategies. Read more...
The History of the Billable Hour with Jon Lax The History of the Billable Hour with Jon Lax – 006
Most professionals (accountant, lawyers, designers, developers) charge by the hour because that is how it has always been done. Jon Lax has done the research to explain why. In the early 1900s, an attorney at Boston Legal Aide asked MIT for assistance managing a backlog of cases. The result was the creation of the billable hour for professional services. Jon says it is a playbook designed for the wrong era.
The Philosophy of Value Pricing
- What is the most important thing you can share about pricing?
- It is a way of looking at the world rather than a formula that “automagically” solves your business problems. Read more...
Seven Ways to Increase Law Firm Billable Hours
Let’s be honest. Tracking time and then generating invoices is the least fun part of being a lawyer or running a law firm. You went to law school to practice law, that’s your passion. Yet without the essential task of tracking your time well, invoicing promptly and collecting money, there’s no way to keep your practice going!
Can your firm honestly say it’s collecting all the billable time possible? Clio’s bombshell Legal Trends Report in September startled the industry by showing a dramatically lower number of billable hours as a percentage of hours worked than previously thought. Read more...
Aggressive billing rates at elite law firms pay off
Top law firms are seeing big returns from aggressive billing rate rises.
The most successful law firms are the firms with the greatest published rate rises, according to Citi Private Bank's Law Firm Group. The group analysed recent billing trends and concluded that the top performers, whilst applying discounts to published rates, were realising rates ahead of less aggressively priced competitors. According to the research, rates at the elite firms rose to 4.4 per cent compared with 3.3 per cent for the rest. Read more...
Why Smart Law Firms are Hiring Salespeople
Sales is not something that most lawyers think about, even though they are probably out there selling almost every single day. There just hasn’t ever been a role for sales in the traditional legal business model. But that may be starting to change. Legal services are becoming increasingly commoditized, and law firms are waking up and realizing they need to start acting like a real business, where marketing and sales are the name of the game. In this post, we’ll explain why smart law firms are hiring salespeople, explain the role of a salesperson in the firm, and look at how focusing on sales can help you grow your practice.
Sales is missing from the current law firm model
Today’s law firm model is pretty standardized. Attorneys and paralegals do most of the actual legal work, billing by the hour or for a flat fee. Receptionists and office admins pick up the phones, handle client intake and scheduling, and manage billing and collections. Read more...
6 Disruptive Trends in Pricing
In the digital age, pricing has become a more strategic—and complex—discipline for CMOs and other business leaders. Six trends in particular are changing the way companies can both create and capture value.
Though pricing has long been a fundamental component of marketing strategy, it hasn’t always been a top-of-mind concern for senior marketers. In many organizations, midlevel managers in marketing, product management, sales, or finance collaborated to set prices. In recent years, however, as rapidly evolving technologies and business models transform many industries, strategic pricing—a holistic approach to delivering value and capturing revenue in a way that maximizes profitability—has become a priority for many C-level executives. Increasing amounts of data are also providing business leaders with new insights into customer preferences, value chain dynamics, and competitors’ strategies—with implications for pricing. Read more...
Barnes & Thornburg Budgeting Push Pays Off in Record Revenue
Gross revenue jumped 7 percent last year at Barnes & Thornburg, where a push to use budgets and legal project management has grown to encompass 20 percent of the firm's work.
Over the past few years, Barnes & Thornburg has developed a budgeting program known as BT ValueWorks that one-third of its partners are using to provide certainty to clients on their bills. It is being used currently for $80 million worth of work, a full 20 percent of the firm’s revenue.
Something else is becoming predictable at Barnes & Thornburg. It has set revenue records for 19 straight years dating back to 1999, the latest year data is available from The American Lawyer. Read more...
Stagnation and the legal services industry
Real transformation has yet to arrive writes Ken Grady in his latest post Stagnation and the legal services industry. Welcome back Ken! Readers can look forward to the sequel in a few days from now.
It is unpopular today to write something about the legal industry from a realist perspective. Optimism abounds among entrepreneurs, and among the old guard there exists the fantasy that the world is not as bad as everyone says it is. Unfortunately for me, I am a realist
I also was trained to believe that focusing only on the positive does not help us grow and improve. So, with apologies to all those people who like to read cheery stories, here is my take (after a long absence from writing) on what I see in the industry. I have written this article after reading many reports from the ABATechShow, various blogs on what is current in our industry, and loads of articles about new software. Read more...
One in three clients will pay more for your services … but who are they?
In its soon to be released 2018 beatonbenchmarks survey, beaton found one in three clients of professional service firms said they would be willing to pay more for the services they receive in the future.
While 65% of clients said they would not pay more than they were being charged by each of their current firms, 25% said they would pay marginally more. And 10% reported being willing to pay somewhat to a great deal more than currently. (See the Chart for the details and the actual question asked). Read more...
Pricing Department: Helping CEOs Build Agile Pricing Organisations
Evidence isn’t just for engineers and scientists anymore. The call for more evidence and more data has also been making its way into the pricing department, commercial and sales functions – and now it’s transforming how CEOs and HR Executives are hiring, developing and managing their people for the future of business.
Evidence driven hiring is a big leap away from standard recruiting – with set rules and long drawn out hiring times and a highly predictable process.
Evidence driven hiring is a faster, fairer and more robust model to embed change and adoption to new ways of thinking and behaving at work. Read more...
The Benefits Of Fixed Fee Billing
A happy client is a repeat client. Your client wants to feel that you are concerned about their legal issues and not just the payment of your fees. At the same time, you do not want to lower the value of your services in your client’s eyes. With a flat fee arrangement, you can effectively meet both of these goals.
Our friends at law firm billing specialists TimeSolv are offering a free whitepaper exploring the various benefits that a flat fee can provide your clients, as well as your practice.
Flat fee arrangements can provide a host of advantages, from reducing the risk of grievance complaints to assisting with regular performance evaluations. Read more...
Auckland Council announces contracted legal providers
Auckland Council has announced the results of an innovative legal procurement process that will reduce the council’s current external legal spend by 10 per cent to 20 per cent across key service lines.
In June 2017, Auckland Council launched a Request for Proposals (RFP) for legal services procured by the council.
Previously, external legal services were procured from a wide range of firms on a job-by-job basis. Read more...
How Legal Analytics Can Help Create the Perfect Pitch
Legal analytics tools help firms address the right needs and stand out from the competition.
With competition increasing and clients expecting higher capabilities, efficiency and control of spend, the best possible pitch is more essential than ever for law firms. That “perfect pitch,” says Jim Jarrell, business development and marketing consultant at New York’s Davis & Gilbert, is all about identifying a client’s need, articulating the capability to address that need and differentiating the firm from everyone else in the marketplace.
Legal analytics tools, he says, are helping firms address the right needs and stand out from the competition. “I counsel the attorneys I work with to do more strategic research on the target first, using research analytics tools, to really dig into their legal issues, and then tailor their pitch,” he explains. Read more...
In-House Counsel Want 'Appropriate Fee Arrangements,' Data Can Help Them Get There
"I've never met a lawyer who hired a contractor to build their house depending on how long it takes to build it," Cisco deputy GC Steve Harmon said of changing discussions about fee arrangements.
The stress of doing more with less isn’t just a reality for in-house counsel. In a changing industry, where legal operations and budgeting teams have put value and pricing center stage, firm lawyers who used to count on steadily increasing rates each year are now forced to adapt to new pricing strategies.
While in-house and outside counsel negotiating fees are usually seeking a win-win situation, both sides are smart to come to the table prepared with data and proof of value to give them leverage. Some legal departments have created pricing teams focused on the issue, including oil and gas company Royal Dutch Shell. Read more...
Why Excellence In Craft Matters
Most lawyers have lost site of excellence in craft.
The subtitle of this article is a strong, provocative statement. But, it is one supported by my experiences as a general counsel as well as many surveys of general counsel. It also is supported by clients who, increasingly, have jettisoned outside counsel for mediocre performances. And, it is supported by new evidence coming out of Judicata that shows what happens when excellence is part of a legal practice.
There was a time when law firm reputations were defined by the “quality” of the lawyers they hired (code for what law school the lawyers graduated from and their ranking in their class) and the stature of the clients they represented (code for whether they represented the elite of corporate America). The top firms, primarily New York firms, commanded top dollar for their services and were admired as the elite legal practices in the United States. Read more...