Briefing Frontiers Legal IT Landscapes Survey Roundtable Report: Improving Pricing and Profitability
Earlier this year, Briefing magazine released the results of its Frontiers Legal IT Landscapes (LITL) survey. Sponsored by Intapp and other industry leaders, the survey explored trends and challenges within the legal industry, specifically the ways in which professional services firms across Europe, the Middle East, and Africa (EMEA) are coping with the effects of the COVID-19 pandemic.
Earlier this month, survey sponsors hosted a roundtable event to discuss the results, and brainstorm ways that firms can remain relevant and competitive in this increasingly complex business climate.
(The event was convened under the Chatham House Rule, which allows us to share relevant information without revealing speakers’ identities.)
Competing for Business
The LITL survey reported additional evidence of the inroads that Big Four firms are making into the legal industry, with 40% of the respondents acknowledging their threat. However, there’s still no change to the organizations that firms consider to be their biggest competition: A clear majority (84%) of firm leaders responded that other firms like theirs poised the greatest threat to their future business.
Unsurprisingly, survey respondents named pricing and profitability as a priority for their firms during the coming 18 to 24 months.
“Lawyers often conduct pricing conversations without the necessary information and background to ensure those conversations result in the optimal outcome for the client and the firm,” said Alan Conway, Practice Group Leader of Operations and Finance at Intapp. “Firms aren’t investing enough; not only in technology but also in building out their pricing functions to support their lawyers in more of their engagements.”
Improving Pricing and Profitability
To collect the data needed to measurably improve business processes and increase profitability, some firms have adopted AI technology and platforms. AI-based pricing platforms give firms the insights and visibility they need to accurately scope, price, budget, and monitor engagements. “Pricing matters accurately based on meaningful data, such as insights from historic matters, is proving invaluable to this process,” said Conway.
Of course, AI-based platforms don’t merely collect data. As revealed in the roundtable discussion, these platforms also provide data-driven intelligence and insights in a way that allows firms and clients to better grasp the information presented.
“Technology can help present the right pricing structures for the right markets and services, and help with putting proposals together,” said the former pricing leader of a major U.K.-based law firm.
“It’s not so much about the data as it is how you can present that information to the lawyer and ultimately the client,” added a pricing leader from another leading U.K.-based law firm. “It’s the interpretation of the data which provides the value.”
Embracing Change and Technology
Despite the numerous benefits of AI technology, many firms have been hesitant to make the necessary investment. Their professionals have become accustomed to manual and paper-based processes, and decision-makers often believe AI-based software would be too expensive. When the COVID-19 pandemic hit, however, firms quickly realized that they would need to adopt new technology and embrace a remote work culture if they were to continue to thrive.
“The COVID-19 pandemic has clearly shown that investment in technology will be a critical catalyst for the recovery of U.K. businesses,” said Richard Houston, Senior Partner and Chief Executive for North and South Europe at Deloitte, in a recent press release. “Business leaders are looking for more-digital ways of operating, setting the stage for significant and longer-term cultural change.”
Roundtable conversation also touched on the idea that AI technology is crucial to successfully navigating the ever-evolving legal landscape. One attendee, who serves as head of pricing at a large international firm based in London, pointed out that client expectations have increased, with more clients demanding their firms deliver services quicker and at lower prices. Many clients seek firms that offer an outcomes-and-value-pricing model rather than the traditional hourly-rates model, and want firms to prove that they are indeed utilizing data in the most efficient ways possible.
AI-based technology can help firms meet this expectation and allow them to best serve their clients while meeting their own financial goals. Pricing platforms help firms capture work effort and time to prove to clients that the lawyers are addressing matters in the most efficient way possible. AI platforms also provide clients with more transparency into matters than ever before, allowing them to closely collaborate with lawyers whenever budget, scope, or other pricing issues arise.
“Traditionally, firms would deliver the work and then go through it afterwards to see what went wrong,” Conway pointed out. “They didn’t get the opportunity to correct course. But if you’re able to present the reporting in the right manner, and sooner, you can fine-tune toward a different outcome.” By having visibility into AI-derived insights and reporting, both lawyers and clients can identify problems quicker and ensure that all client expectations are properly met.
For EMEA firms to remain competitive, firm leaders must invest in AI-based technology. This investment will allow firms to develop both tactical and strategic approaches to pricing, price matters more accurately, and increase profitability and client satisfaction.
Read the full Briefing survey to gain further insights into the future of legal technology and EMEA firms.
Learn more about using AI to deliver higher profit and better client value:
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- How Consulting Firms Can Upgrade the Client Consultant Relationship to Win Recurring Business
- Why Accurate Time Tracking for Accountants Is Crucial for Creating Growth
- The Future of Accounting: Working In a Connected Firm
- Improve Collaboration and Connectivity with Intapp Workspaces