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.
Pricing checklist for law firms
Getting your pricing right is usually the fastest way to transform the profitability of any law firm. Richard Allen, a senior consultant with Burcher Jennings, lists 14 pricing steps that can make a huge difference.
- Listen to your client fully, to understand the client and the context surrounding the work in question – so you understand what value means to this client, on this specific matter.
- Work out what it will take to get the job done (scope, assumptions and exclusions).
- Document the arrangement fully, with accurate (yet concise) scope, assumptions and exclusions. Assumptions in particular provide you with a yardstick against which to measure any mission creep, enabling a renegotiation of the price further down the line. Read more...
Q2 2022 Law Firm Financial Index Analysis: Rates & realization return to prominence
As legal demand continued to slow in the most recent quarter, law firms may have found a new pathway toward profitability in pursuing stronger rate growth and higher realization
In the second quarter, the legal industry saw overall demand for legal services contract as nearly every practice area experienced a softening of demand. With the sharp reversal in demand performance from 2021, increasing expense growth dragged the Thomson Reuters’ Law Firm Financial Index (LFFI) score to its lowest point yet recorded in this past quarter. Read more...
Law Firms Likely to Make 'Course Corrections' as Inflation Challenges Billing
Average billing rate hikes of 5.8% in 2022, per Wells Fargo Private Bank, lag behind the sharper increases of recent years. They also trail the U.S. inflation rate.
If inflation remains at current levels, law firm billing rate increases won't be able to keep pace. But firm leaders may make other "course corrections" to capture profits through the end of 2022, analysts say, by utilizing leverage and alternative pricing models and making additional investments in technology. Read more...
Law firm profitability: Capturing profitability and its benefits
In this two-part series, we examine how profitability analysis has become a crucial strategy for many smaller or solo-practitioner law firms and how these firms can best capture the level of profitability they need to flourish
In the previous installment in this series, we explored what profitability is (and isn’t), how to think about costs (including attorney wages), the potential advantages of truly operating at scale, and how the price the client pays — whether lower or higher than simple billable hours — can result in better revenue outcomes for the law firm.
But law firm profitability does not end with that portion of the analysis. Of equal importance, of course, are the concepts of client expectations, data and metric capture and analysis, and ultimately, the positive outcomes that law firms can experience by meaningfully examining the full spectrum of their profitability.
'There Is Going to Be Pushback': Personal Injury Lawyers Fire Back at Critic Over Pricing and Practices
"A case that settles for $2 million doesn’t take 10 times the work as a case that settles for $200,000, so lawyers shouldn’t make 10 times the fee,” said Joshua Schwadron, founder and CEO of legal technology provider Mighty.
The feud continues between attorneys and Mighty, a legal technology provider that’s emerged as a competitor in the personal injury sphere.
In response to backlash from personal injury lawyers to the tech company’s plan to provide low-cost legal representation, Mighty CEO and founder Joshua Schwadron invited one of his critics to a live debate. Read more...
Acing Client Communications: How to Explain an Increase in Your Rates
After doing your research on trends in lawyer billing rates, you’ve decided to raise your own rates. It can feel uncomfortable. Some of us are reluctant to charge what we are really worth or feel bad about increasing rates for longtime clients. We may struggle with being in a high-rent market, such as New York or San Francisco, while serving clients in other locales used to paying lower regional rates.
But, while clients may not be overjoyed to receive the announcement that their rates are increasing, they are used to receiving such news.
So why not make this an opportunity to communicate clearly, accurately and confidently with clients about where their money is going? Read more...
Troutman Pepper Launches Client Program to Provide Services 'Beyond the Billable Hour'
The program uses client feedback, surveys and scorecard data to come up with client solutions, the firm said.
Troutman Pepper has launchd an initiative aimed at connecting clients with firm resources to address client challenges.
The firm initiative, which the firm calls Troutman Pepper Plus, uses client feedback, surveys and scorecard data to understand problems and challenges clients face and come up with solutions, the firm said. Read more...
Partners billing more post-pandemic
New research shows that not only are law firm partners bearing a markedly greater load in billable hours, but their job satisfaction is depleting as a result.
Thomson Reuters recently released its 2022 Australia: State of the Legal Market report, detailing the state of affairs for the nation’s legal services sector and the market forces shaping it, based on financial metrics from 16 participating law firms, client insights from 111 Australian legal service buyers and a survey of nearly 2,500 lawyers around the world. Read more...
ALSPs Market Growth in Possible Recession Likely to Stick Around Long Term
While the recession is likely to boost the demand for ALSPs as companies face tighter budgets, the growth of New Law is still unlikely to create much competition for law firms who remain the main players in the legal market.
A potential economic downturn has been looming over the legal market for some time now, and while the full consequences of a recession are hard to predict, some legal businesses may come out of it winning.
Take for instance, alternative legal service providers. The combination of legal departments’ tighter budgets, an openness to explore alternative legal services born out of the pandemic and an increased maturity in the services New Law offers has created a favorable environment for ALSPs’ market share to grow exponentially. Read more...
Legal Tech Can Make You More Profitable – Wolters Kluwer Report
They said it couldn’t be done, but it looks like the ‘Future Ready Lawyer Survey’ by Wolters Kluwer (WK) has shown that successful legal tech implementation makes law firms more profitable, with 63% of ‘technology leading’ firms reporting profitability increases over the past year, compared to only 46% of other firms that have put less emphasis on tech adoption.
The chunky report, based on a survey of over 750 legal professionals across Europe and the US, concluded that: ‘Legal organisations that fully leverage technology outperform organisations that do not’. (And in fact they say similar results have been shown in previous years, so the consistency of these results does show validity.) Read more...
Wagatha Christie costs process 'could take two years' says legal expert
The process to settle Coleen Rooney & Rebekah Vardy's legal costs 'could take two years' admitted one expert, while adding Coleen may never recoup her entire costs despite winning.
A specialist costs lawyer has revealed that Rebekah Vardy and Coleen Rooney could spend another two years going through the process of having their legal bills assessed after Rebekah lost her High Court libel battleagainst her fellow footballer’s wife on Friday (July 29).
The total legal costs of the case are thought to be around £3 million, of which Rebekah will now have to pay the lion’s share. Read more...
Claimants call for review of stagnant fixed costs
Claimant representatives have called on civil justice rule-makers to refresh fixed costs that have been unchanged for almost 10 years.
The Association of Consumer Support Organisations, a trade body for claimant companies, said fixed costs for certain services are in need of immediate review.
Costs for running personal injury cases have not been revised since July 2013 and there is presently no mechanism to ensure their review. Figures calculated by ACSO show that fixed costs for RTAs settling at more than £10,000 were set at £800 in 2013. To keep pace with inflation, that should now be £1,020. Read more...
PwC and EY awarded extra £1m costs for private prosecution work
Big Four accountancy firms PwC and EY have been awarded an extra £1m in costs each after a successful appeal over the largest private prosecution bill ever submitted to the Legal Aid Agency.
Legal expenses insurer DAS UK Holdings submitted a bill of around £7m after it prosecuted former chief executive Paul Asplin, ex-head of claims David Kearns and one-time head of marketing Sally Jones for conspiracy to defraud by making ‘secret profits’ through medical report business Medreport – which received ‘an immense amount of business’ from DAS. Read more...
Court rejects firms' claims for cracked trial fees
A costs judge has rejected solicitors’ claims to be paid a cracked trial fee for indictments which were quashed after trial.
In Shabir & Anor, R, appellants Harris Solicitors and ERCJldwick Law challenged the decisions of determining officers not to pay the fees, arguing that their respective clients had pleaded not guilty to the counts in the relevant indictments and the prosecution had chosen not to proceed. As such, they said, the definition of a cracked trial had been satisfied. Read more...
Court denies claimant chance to recover deductions made by PI firm
A former client who threatened his solicitors with legal action over deductions from his damages has been told he cannot pursue the case.
Sitting in Sweeney v Wise Solicitors Ltd, Costs Judge Rowley said the claimant Andrew Sweeney had effectively consented to the deductions by signing an authority form sent to him by the York firm.
Sweeney then made what the judge called a ‘barely veiled threat’ to bring a claim against the firm, having been in contact with a legal marketing company, which introduced him to JG Solicitors. Read more...