Recent weeks have seen a spate of talks on pricing. Proskauer and LawVision hosted a round table to discuss strategies and pricing advice. ILTA also hosted a webinar looking at how the legal industry is using historical data to inform pricing choices. Clearly, pricing is one of the hot topics in legal practice right now. And with good reason. After all, clients are increasingly demanding fee arrangements instead of hourly billing. With this comes the danger that a poor fee quote could lead to big write offs at a later stage. Play it too safe however, and you aren’t likely to win the bid for the work.
So how can legal professionals navigate these complex waters? Well, data and communication according to the experts. Here’s what we learned from all these recent pricing chats.
Clients want cake, not a recipe
Its a theme we have heard time and again at Clocktimizer. This time, it was Justin Ergler of GlaxoSmithKlein who voiced it. The priorities of a client are not the same as those of a law firm. As such, clients want fee quotes which are tailored to the best outcome for them. They want a price in line with the value of the work itself. As Justin put it “we’re buying the cake, not the recipe”.
So, what can law firms do to work on this? Well Justin first suggested basic communication with the client. Understand and properly scope the issue together, and identify the business needs. Although this is advice heard on a daily basis, it clearly still needs to be worked on. Next, set a price you and the client are happy on, and stick to it. To do this, you need to base your pricing in historical data to be certain of success. After all, write offs are inevitable if you go over budget.
Data supports more than just fee quotes
For many firms, historical data is used to build good fee quotes. This makes sense. After all, it’s how most of us calculate the cost of a piece of work. However, according to Keith Maziarek and Andrew Medeiros, it can be about much more too. Keith noted that good data can support the entire matter lifecycle. This insight can create efficiency measures which reduce overheads and increase profit margins. It can also be used to increase cross selling opportunities with existing clients. It can offer performance analysis and insights to streamline existing processes and can even monitor budgets to avoid writeoffs.
As Andrew noted, there are many tools to help you in this process. After all, no one wants to be stuck in a basement poring over spreadsheets. We were happy to hear that Andrew uses Clocktimizer for matter analysis. The analysis of historical data, combined with the grouping of task codes, can give a clear insight into how firms have handled different types of matters in the past. This can lead to better pricing choices in the future.
Listen to the webinar to find out more
Those of you wishing to learn more tips and tricks from these pricing specialists should head to the ILTA page to listen to the webinar recording. The presenters also shared some excellent slides covering what data points you can collect, where data can support the matter lifecycle and the future of Big Data within law. Its definitely worth a listen.
If you are based in the US, we would also recommend signing up for the pricing round tables with LawVision. They also host round tables on a number of other topics.