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.
How law firms can stop rate degradation
To ensure profitability, law firms need to come to grips with the way the rates they charge clients for legal work can get degraded, resulting in lost revenue over time
Law firms, like so many other businesses, aren’t always able to collect the entire amount that they bill their clients. Indeed, there is almost always a difference between the rate clients agree to pay (what we often call the worked or agreed rate), the effective rate clients are billed, and the actual rate clients pay. Read more...
Measuring success: why you need external feedback
So, you think you know what your clients think?
Many firms are eager to discover how satisfied their clients are, often using metrics like Net Promoter Score (NPS) to gauge success. A survey sent by the firm, often in the wake of a piece of work being finished, will ask clients to score its services. NPS ratings provide an indication of how likely clients are to recommend that firm to others based on their experience.
Any score above zero is a small win – a pat on the back for your firm and team. It confirms you have more clients who would recommend you than those who definitely wouldn’t (a NPS below zero would indicate the opposite). Read more...
Legal Project Management For Beginners: 10 questions and answers
Legal Project Management has grown immensely since I started this blog site in 2012.
Most people in the legal services industry (in the U.K at least) have now heard about legal project management.
But many are still unsure about what legal project management is, what its common tools and techniques are and what is required of legal project managers. Read more...
The 1,800-Hour Year: Pipe Dream or Essential for Lawyers' Well-Being?
An 8 a.m.-to-6 p.m. workday would decrease profit margins by 15% to 20% at top firms. It may also be the only way for law firms to support many attorneys' mental health.
When Big Law attorneys talk about the maximum amount of hours they could bill annually without sacrificing sleep, family time, exercise and general well-being, the figure of 1,800 hours comes up a lot.
It’s what many large firms used to ask of their attorneys, according to one managing partner, until billing expectations began rising with the tech boom of the 1990s. It’s the maximum amount of work most people can do without hurting their physical or mental health, according to scientific research, and it’s the official recommendation of two state bar associations. Read more...
AI-Pocalypse: The Shocking Impact on Law Firm Profitability
The Big Idea: We apply reductions in hours due to Generative AI to a few matters to determine Generative AI’s potential effect on profitability.Key Points:
- We establish a baseline sample matter and compare changes to that sample matter when Generative AI is applied
- We explore how leverage is affected by Generative AI and how those changes may affect profitability in unexpected ways Read more...
Rate pressure and securing ‘competitive’ quotes
General counsel across the board are seeing either downward pressure on rates from external providers or an increase in their fees. Either way, law department leaders will increasingly be concerned with how to minimise external legal spend.
Amid the storm of inflationary and other economic pressures in recent times, corporate lawyers remain ever-committed to the evergreen importance of doing more with less.
Law firms are also beset by challenges, with – as has been reported by Lawyers Weekly – salary rises having slowed down and some having to explore and implement redundancies to their back offices. Read more...
Practice Innovations: How law firms can get started with AFAs and subscription pricing models
Law firms should pursue alternative pricing models, including subscription models, to increase client satisfaction with the pricing process, says Google's Aaron Boersma
Law firms and their clients alike seem to struggle to find comfort with many alternative fee arrangements (AFAs), possibly because many AFAs don’t align with the typical way of thinking about hourly billing as standard practice in the legal profession. Read more...
Big Law and Midsize Firms Are Charting Different Paths to Growth
Am Law 100 firms have tried to cut head count and expenses, midsize firms have sought to bolster revenue, and the Second Hundred have sought "to find a Goldilocks zone between the two," says a new report.
Demand has risen across the industry. But the largest law firms are still charting a different course than their Second Hundred and midsize counterparts.
Am Law 100 firms have reined in expenses and trimmed head count, reducing the number of associate full-time equivalents by 2.5% since the start of 2022, according to the latest Law Firm Financial Index from Thomson Reuters. Midsize firms, on the other hand, have increased head count and gotten extra aggressive on billing rates, while Second Hundred firms have sought a middle ground, the report stated. Read more...
How does a law firm’s business support add value today?
Traditionally, many law firms have seen their operational support as a necessary evil, a cost to be contained rather than a value-add.
Of course, this is not true of all firms. Many see business support as an integral and fundamental part of the firm’s functioning. And across the industry, we are seeing the growth of law firm operational support into new areas, changing the definition of the value that business operations can bring to the business and changing attitudes, even in firms where support has at best been ‘tolerated’. Read more...
Majority of conveyancing firms reduce fees based on competitors’ prices – study
The majority of conveyancers believe their firm tends to reduce prices based on what competitors may charge to at least some extent, thus engaging in a “race to the bottom”, a new survey has found.
Of 70 respondents to a pricing survey conducted by Big Yellow Penguin and Bold Legal Group, 35 said their firm would reduce prices based on their competitors’ prices “to some extent”. Four others said this is a practice their firm would “always” engage in. Read more...
How the Billable Hour, Among Other Factors, Pushes Women Out of the Legal Profession
In this week’s episode, Elizabeth Manno, partner at Venable and co-chair of the National Association of Women Lawyers research committee, discusses some of the issues attorneys have pointed to that could explain the steady and significant attrition of women from law firms relative to the number of women entering the profession as associates.
After 15 years of surveying Am Law 200 firms, the National Association of Women Lawyers, or NAWL, decided to reach out to individual women attorneys about their lived experiences as part of a so-called “Listening Tour.” Read more...
MoJ increasing new fixed costs to reflect high rate of inflation
The Ministry of Justice (MoJ) is to increase the new fixed recoverable costs (FRCs) coming into force on 1 October to take account of the high rate of inflation.
It is also consulting on further changes to the regime, including a £500 cap on the costs of any costs assessments, and gave a strong indication that the separate FRC regime for clinical negligence cases worth up to £25,000 is still going ahead.
The consultation responds to issues raised following publication of the FRC rules. Read more...
Fixed costs: firm will ‘manage client expectations’
A leading claims firm has promised it will not walk away from personal injury or clinical negligence work despite the imminent prospect of fixed costs – but has admitted that client expectations will have to be managed in the new regime.
The expansion of fixed costs – extending to most civil cases valued up to £100,000, comes into effect on 1 October. Firms are spending the summer adjusting business plans and working out whether they can afford to take on as many cases in future. Read more...