Sandpiper Conference Panel Discussions Reveal a Strengthened Focus on Law Firm Profitable Delivery and Client Value
Over the past year, we’ve witnessed the transformation of the legal industry to a fully virtual business model, which has significantly impacted technology requirements for connected platform solutions and data transparency. Due to the sudden economic shift brought on by the COVID-19 pandemic, partners are investing more time and mindshare in understanding the implications of operational data and how they can use it to positively impact financial outcomes.
As part of this transformation, we are witnessing a significant shift in mindset in the legal industry around the importance of operational excellence and profitable delivery, which places growing pressure on the pricing and legal project management function to provide quick access to metrics on matter and financial KPIs presented in an easily digestible format.
At the recent Sandpiper Partners Profitability, Pricing, and Data Analytics Conference, Sharon Scenna, Senior Director of Solutions Management for OnePlace Operations & Finance at Intapp, participated in a panel discussion about using data analytics during a COVID-19 landscape, and what lies ahead post-pandemic.
Adopting a Modern Approach to Securing New Business
Resulting from the widespread client-driven mandate on cost containment, law firms are confronted with smaller pipelines, as clients are keeping more work in-house, tightly managing outside counsel budgets, and agreeing to settlements rather than investing in full-blown litigation through trial.
To contend with lower inventory levels and remain competitive, savvy firms are adopting a more sophisticated approach to secure new business by outlining detailed matter analysis and innovative pricing options to provide better client value.
Leveraging AI to Develop Detailed Matter Plans
During the panel discussion, access to matter analytics — which firms can use to quickly and confidently develop budgets for matters — surfaced as a key pain point. Firms are starting to adopt AI tools to analyze time entries and provide a summary of metrics on a matter, including duration, fees, staffing models, costs, and margin data.
Visibility into matter experience helps clients see around the corner to anticipate their risk and investment to solve a legal issue. During one of the panel sessions, Justin Ergler, Director of Global External Legal Relations at GlaxoSmithKline, shared the insight that in-house counsel representatives are measuring internal and external work allocation trends when analyzing fee proposals.
Initiating a Collaborative Dialogue Between Firms and Clients
When firms and clients are mutually armed with data points — including things like the range of time to close a transaction and average fees incurred through trial — transparency on metrics fosters candid communication between firms and clients on establishing a fee structure that mutually shares risks and rewards.
Firms can no longer rely on historical phase and task code data to inform pricing; instead, firms are increasingly turning to AI tools to provide a thorough analysis of tasks and activities handled during matters to identify patterns. In addition to providing turnkey insights for quick and accurate pricing, AI also powers the ability to review time capture data in real time, which helps firms conduct analysis on short and long-term capacity trends to inform decisions on staffing requirements.
Achieving Operational Efficiencies that Drive Better Forecasting and Budgeting
Firms are on the lookout for opportunities to cut costs through operational efficiencies; for starters, they’re challenging the status quo on necessary expenditures. During the panel sessions, David Fitzgerald, Vice Chairman of CBRE, explained that firms are looking at ways to lower costs through reduced investment in real estate for sustainable savings resulting not only from less office space, but also streamlined staffing structures.
Firms are keeping a close eye on the pipeline and forecasting revenue based on planned matter budgets. Legal Pricing Management (LPM) teams monitor budgets to actuals as a tool to get ahead of write-off issues and forecast the timing of fee remittance. Furthermore, firms are focused on connecting siloed data — including pricing, client requirements, and business development tools — to improve operations.
Sharing Success with Clients
Clients are looking to their firms for partnership with respect to pain and gain. Gretta Rusanow, Managing Director and Head of Advisory Services for the Law Firm Group at Citi Private Bank, shared legal industry metrics. During the pandemic, many firms achieved double-digit profit-per-partner growth resulting from a steady pipeline and significant cost cutting. Subsequently, clients — who are experiencing a downturn attributable to COVID-19 — are now asking their firms to share the burden.
As a result, many pricing and legal project management teams are engaged with renegotiating pandemic-driven short-term fee reductions, which reflects a commitment to nurturing the long-term relationship.
Learn more about using AI-based technology to increase profitable delivery and client value:
- The Evolution of Legal Data Analytics and AI-Based Insights
- Manage AML and CDD with OnePlace Risk & Compliance
- Win Business and Grow Your Firm with Cloud-Based Solutions
- Time Tracking Software for Consultants: How Automated Consulting Time Tracking Eliminates Costly Inefficiencies to Improve Profitability
- A First Look at OnePlace Collaboration & Content for Accounting and Consulting