With the Virtual Pricing Director Pricing Espresso® we aim to bring you your pricing 'shot' - some of the most interesting, thought-provoking and informative material we can find globally which will be of interest, relevance and help to you in your firms' pricing challenges.
The Pricing Expert's View of the Billable Hour
Richard Burcher dedicates all of his time to legal services pricing consultancy work and is widely regarded as the leading international authority on pricing legal services. We caught up with him to find out his take on the billable hour. Listen here...
Legal IT Win: Top UK firm Hugh James adopts Virtual Pricing Director
Hugh James has become the latest UK top 100 law firm to deploy SaaS legal pricing platform Virtual Pricing Director, we can reveal.
VPD, which was conceived of and built by UK cost consultancy Burcher Jennings and legal pricing experts Validatum, integrates with any of the major practice management systems including Elite 3E, Aderant and Fulcrum/SAP. Hugh James is using VPD to manage the entire pricing and profitably journey of a matter through the firm, from the creation of the proposal, monitoring of budget v actual revenue and gross profit margin, to resourcing. Read more...
Shakespeare Martineau deploys Virtual Pricing Director
UK Top 100 law firm Shakespeare Martineau has deployed SaaS legal pricing platform Virtual Pricing Director (VPD), we can reveal, integrating it with their Aderant Expert practice management system.
VPD, which was conceived of and built over four years by UK cost consultancy Burcher Jennings and legal pricing experts Validatum, integrates with any of the major practice management systems including Elite 3E, Aderant and Fulcrum/SAP. Shakespeare Martineau has been working with Validatum since 2015 and was attracted by the combined professional development plus technology offering. Read more...
Baker Donelson Sees Record Year Amid Hikes in Demand and Billing Rates
Even after a rate hike, the firm said its billing rates were still desirable because of how they compare across its office markets.
After years of revenue lulling just under the $400 million range, Baker, Donelson, Bearman, Caldwell & Berkowitz saw its revenue shoot beyond that mark for the first time last year.
The Memphis-headquartered firm boosted revenue by 8.5% in 2022, reaching $412.7 million. Meanwhile, its profits per partner climbed by 10.7%, amid an 8% decline in its equity partner ranks. The firm’s head count increased by 1.8% after years of declines. Read more...
'Law Firms Are Really Expensive': How In-House Leaders Ensure They Get Their Money's Worth
“There are some lawyers that have been practicing for a number of years or with the firm a number of years that don’t have the experience or knowledge,” said Stephen Kim, chief legal officer of Avicanna.
General counsel say it’s on their shoulders to set clear expectations for outside counsel—a step they say is essential in an era where many believe associates’ hourly rates are excessive and hybrid work policies have made their training more difficult.
For instance, Ben Adams, the chief legal officer of the money-transfer company Western Union, said he sets limitations on staffing by junior associates, and Tim Parilla, the CLO of the legal-software firm LinkSquares, goes into detail on how he expects work to be staffed and billed, including the seniority of associates. Read more...
Guideline rates 'not particularly useful' for £500k costs assessment
The High Court has rejected a challenge to a £500,000 costs bill despite the fees charged exceeding the guideline hourly rates by as much as 40%.
In Harlow District Council v Powerrapid Limited Mr Justice Choudhury said it was open to the court to decide that guideline rates were only a starting point in detailed as well as summary assessments.
He concluded that the GHR were ‘not particularly useful’ in this case and pointed out that definitions for categories of work were ‘very broad’ and that secondary London rates encompassed services that were ‘the most straightforward and simple of cases [through] to work that is legally highly specialised and difficult’. Read more...
‘The hourly charge is old and should be dead by now’
In-house counsel must arm themselves with data to push for more creative pricing models from external legal panels, according to a legal services provider.
TransPerfect Legal Solutions director Tom Balmer said ahead of the Corporate Counsel Summit 2023 that it is time to discard older time-based fee models where external legal firms charge organisations by the hour for their services.
“The hourly charge is old and should be dead by now, but it’s still around,” he mused to Lawyers Weekly. Read more...
Can Rates Make Up for Expense Growth Much Longer?
Rates and expenses have a limited window to rise in unison before law firms have to turn to innovation.
Large law firms became more expensive to operate and less profitable in 2022, despite growing in terms of revenue and head count. While equity partners took home less money, associate and nonequity partner compensation continued to rise. Rate increases managed to keep gross revenue in the black as demand slid by nearly 2%. Still, the profit margin for The Am Law 100 fell 2 percentage points to 42%, wiping out the profitability gains of 2021 and putting firms below the average 2020 profit margin of 43%. Read more...
'Take Advantage of the Leverage': How Legal Departments Can Rein in Rate Hikes
"The data we have shows that some of the largest purchasers of legal services in the world are paying way over average," said Nathan Cemenska of Wolters Kluwer ELM Solutions.
Here’s a novel way legal departments could approach fee negotiations with their outside law firms: Adopt a “good cop/bad cop” strategy, bringing in a third party to play hardball in the process.
That’s one of the suggestions from rate-negotiation experts, who say the approach reflects the reality that general counsel often are ineffective at keeping rates in check, in part because they’ve become friendly with their law firm lawyers and fear damaging that relationship. Read more...
AI Could Reduce Billable Hours. But Is That Really a Bad Thing?
AI is a threat to the billable hour, but it also offers the opportunity to get out of low-value work and meet latent demand from clients.
A business model built on a boatload of billable hours won’t always be in fashion.
Technology has already altered traditional pricing models in pockets of the legal industry, such as insurance defense. Clients are increasingly asking law firms to show their work, often on similar types of matters, to infer whether a favorable outcome can be achieved, and at what cost. Read more...
Cost of assessing costs is a 'nonsense', says leading judge
A senior judge has questioned why costs law itself is so expensive and suggested there may be scope for greater transparency around costs during litigation.
In a roundtable convened by the Association of Costs Lawyers, Lord Justice Birss said the expense of assessing costs was a ‘nonsense’ and it was ‘absurd’ that such high fees are incurred on straightforward cases.
The event was convened to mark 10 years since the introduction of costs budgeting and held in the shadow of the Civil Justice Council’s costs review, which is led by Birss, who is the deputy head of civil justice. Read more...
JR threat amid clin neg fixed costs confusion
Lawyers have demanded to meet the Ministry of Justice after it emerged that some clinical negligence claims may be captured by new fixed costs rules.
Draft rules for the extending of fixed recoverable costs – set to take effect this October – appear to include clin neg claims entering the intermediate track, where breach of duty and causation are admitted. The extension applies to claims worth up to £100,000.
The MoJ has always maintained that clin neg would not be included. Indeed, the Department of Health is still considering its response to a consultation on proposals for FRC applied to claims worth up to £25,000. Read more...