With Validatum Pricing Espresso® we aim to bring you your morning 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.
Procurement Departments Negotiating 'Too Aggressively'?
"As I hurtled through space, one thought kept crossing my mind - every part of this rocket was supplied by the lowest bidder." John Glenn - the first American astronaut to orbit the Earth. Little did he know…
January 28, 1986 saw the Space Shuttle Challenger break apart 73 seconds into its flight, leading to the deaths of its seven crew. The spacecraft disintegrated over the Atlantic Ocean, after an O-ring seal in its right solid rocket booster (SRB) failed at liftoff. Read more...
The Economist: Attack of the Bean-counters
CONSULTING has its Big Three; accounting the Big Four; and executive search a Big Five. But there is no corresponding clutch of dominant law firms. None has amassed as much as 0.5% of an industry with global revenues of around $650 billion a year.
Even the biggest law firms may be anachronistically inefficient. They are run by lawyers, not professional managers, insist on charging by the "billable hour" rather than by results and use little technology more advanced than e-mail. Nonetheless, most big law firms have continued to be highly profitable. Read more...
All that Pricing Data Leads Clients to Ask: Can I See It?
Are law firms ready to share? The arrival of pricing managers at large law firms has armed them with detailed metrics on all the pieces that go into their cost structure and potential profit pie. Now, at least some clients are asking firms to hand over that info.
In-house lawyers are demanding more frequently that their outside counsel be able to prove their costs, and they no longer want to lean on a law firm partner's personal memory for justification. They want numbers, metrics, charts and averages. They're even experimenting with subjecting firms to quarterly business reviews. Read more...
Pricing Isn’t an Event, it’s a Journey
Consider one of the easier, early to deploy and more direct forms of pricing analysis — the net price to volume plot — and it becomes obvious why pricing improvements need to be part of a long-term strategy.
And like other strategic initiatives, it will require investment over time with the expectation of future returns. Read more...
Litigation Costs Study: How P&C Shops are Keeping a Lid
It's a balancing act: fraud versus fair settlement and loss costs with expenditures. As far as legal departments go, those working insurance claims for U.S. property and casualty (P&C) carriers are under constant pressure to drive operational efficiency, while providing quality customer service. Read more...
Competitive pricing is about getting smarter, not cheaper
The standard response to increased competition is to drop prices but lawyers would do better to "actually talk to their client" about how to create value for money, according to the chief pricing officer at Allens.
"If you are one of a number of firms that [a potential client] considers capable of doing the work but they chose the firm that could do it at the lowest price then your pricing strategy has failed". Read more...
Survey Results Released: Analysing the General Counsel Law Firm Relationship
125 in-house General Counsels took part in the survey, 67% from companies with more than £1.1 Billion in revenue a year and more than 1000 employees. Their answers were matched up with over 86 management leaders from the UK's top 120 law firms.
Within the section regarding AFAs it was revealed that 76% of law firms believe in-house General Counsels want to move away from the billable hour, whereas only 58% of General Counsels say they do. Furthermore 57% of law firms say General Counsels ask for AFAs but then revert back to traditional methods, but only 28% of General Counsels thought this to be the case. Read more...
You Charged For What?! Red-Flag Bills
Lawyers always find creative ways to bill, says Marci Waterman, a managing director at Sterling Analytics Group LLC, in Woodbury, New York, part of a growing band of legal bill auditors. "If you tell a lawyer they can't bill for one thing, they'll find a way to bill the time for something else," she says. "But clients are now really scrutinizing bills and pushing them to justify their charges."
Despite that, Waterman, Patrick Woods, executive vice president at auditor Legal Cost Control Inc., and John Toothman, president of legal fee management consulting firm Devil's Advocate, say they routinely sees bills from mainly Am Law 200 firms where lawyers are pushing their luck, like these: Read more...
