Legal pricing trends and how far we've come
This month the 7th annual LMA P3 conference (Pricing, Project Management, Process Improvement) was held in Chicago. Having been part of the P3 community since its inception, it’s interesting to reflect on the key changes in the profession over this period. For us, four key themes stand out.
Not just legal expertise but legal solutions
The first theme is the significant development of legal solutions. While historically, law firms have sold legal expertise by the hour, increasingly law firms are redesigning processes that incorporate technology, alternative staffing models, legal project managers, as well a legal expertise to deliver efficient packaged legal solutions to clients. No longer are clients’ looking solely for legal expertise rather they expect to see ‘a team of all the talents’ and wider, more comprehensive, set of skills to address their legal needs. This brings us nicely to the themes that follow.
It’s all about collaboration
What this requires is much greater engagement and collaboration with clients. While not all clients are willing to engage in redesigning their processes with a specific law firm, (and not all law firms are skilled and engaging appropriately), some of the most beneficial relationships have evolved in this manner. It is interesting to note that although client collaboration was spoken of at the first P3 in 2013, we are now seeing the fruits of these efforts. A number of the sessions at this year’s P3 bore testament to this fact.
The rise of Legal Project Management and Pricing functions
This clearly requires a broader skill set than historically present in law firms, hence the rise of the LPM / Pricing functions, each bringing additional commerciality and process rigor to client matters and engagements, alongside internal law firm initiatives. From tiny acorns mighty oaks have truly grown – both in terms of the number of practitioners but also importantly to their remit and impact. These have become increasingly sustainable and senior level professions with an heavy focus on skills development and certification, increasing remuneration (as the recent TVPi/ Thomson Reuters survey identifies), C-suite access, as witnessed by both the growing number of P3 attendees each year and the number of new attendees (c. 50% in 2019).
Chris Ende (Chief Value Officer of Goulston & Storrs), one of this year’s co-chairs of LMA P3 and also a seven year veteran, made the great point that we now continue to see more ‘Chief’ roles emerge which are not just aligned to core pricing, but more holistically covering how to work with clients to improve the delivery of service and drive greater value.
Perhaps in recognition that those in LPM/Pricing roles can only achieve so much on their own, and the increasing client need for more commercially focused lawyers and advisors, the role that these professionals play has also broadened. The folks in these roles have become more focused on consolidating and embedding change within their firms rather than merely being responsible for the mechanics of profitability modeling and matter management, as in the past.
Technology geared to the overall client lifecycle
And now to the final theme. The technology landscape has changed dramatically over the ‘P3’ years. Some technology vendors have come and gone. But of those that remain, technology solutions are now becoming more focused on supporting the overall client lifecycle. For those solutions which do not address this (and are currently focused on discrete matter pricing and/or reporting, and in effect are ‘costing’ solutions only) there is an increasing need to provide greater integration to existing law firm solutions to enable a more seamless client engagement and to provide greater analytical and data insight capability.
What this drives is an increasing need for practitioners to be comfortable with technology, improve existing data analytics to provide more meaningful pricing and matter insights. Furthermore, there’s also the need to engage with a wider, less traditional set of internal (partners/other departments) and external (vendors/clients) stakeholders in addition to their existing ‘day-job.’
While pricing firstly had to prove its value within firms, through collaboration its increasingly being seen as a central resource for building stronger relationships with leading clients.
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