BUYING LEGAL COUNCIL

Category: Events

Law firm revenues increased by 4.1 percent in the first half of 2016 according to Citi Private Bank’s most recent quarterly report on the legal industry. The increase largely stems from higher lawyer billing rates (average billing rates increased by 3.2 percent) rather than greater demand for services. It is possible that rates will continue to go up as many major law firms just increased associates’ salaries. For example, first year associates’ annual salaries went from $160,000 to $180,000.

This is an interesting development, since clients continue to consolidate the number of firms they work with and pay much more attention to legal billing. (Read Elizabeth Olson’s article in the New York Times here.)

Given this development, it will be more important than ever for you to master the pricing of legal services: Understanding what goes into law firms’ calculations, what are cost drivers, how you best negotiate, and what information you need to provide law firms to so they can give you more than a very rough ballpark figure that no-one feels accountable for. Many law firms believe that as their cost go up, their prices will go up as well.

Become a master of pricing of legal services – sign up for our PRICING BOOT CAMP

Join your peers and counterparts – legal procurement and operations professionals, and law firm pricing and business development professionals – for an intense pricing boot camp for legal services. Learn about Pricing Strategy & Tactics, Negotiations, and Implementation in New York on November 3. Click here for more information.

This pricing boot camp focuses on active, hands-on learning for both client-side professionals and law firm pricing/business development professionals. Experts will help describe best practices in “alternative” or “value” fee arrangements and best practices in effectively responding.

You will work on complex pricing case studies that are based on real-world experience. This is an active pricing boot camp, not an introductory session on legal services pricing. You will be expected to actively participate and need to read the case studies ahead of time.

You will have the opportunities to learn, network, exchange thoughts and experiences. You will take home practical, real-world lessons and how to navigate the turbulent waters of today’s legal market. Master the pricing of legal services – whether you are a buyer or a seller.

Online Boot Camp

If you can’t come to New York in November, participate in our ONLINE PRICING BOOT CAMP and learn about Pricing Strategy & Tactics, Negotiations, and Implementation remotely.

  • Session 1: Wednesday, January 11, 2017
  • Session 2: Wednesday, February 1, 2017
  • Session 3: Wednesday, March 22, 2017
  • Session 4: Wednesday, April 26, 2017

You will receive a pricing case study to prepare for each 90-minute session (remote access). You will get information from the experts and the opportunity to share your insights.

Sign up Now: Early Bird Pricing ends September 12, 2016:

  • $250 for in-person participation (after September 12: $400)
  • $150 for remote, online participation – for all four sessions (after September 12: $250)
  1. Look beyond Discounts: In the legal category, value gains come through process improvements, service unbundling, innovation, risk reduction, and incentive alignment, and not via discounts. The real opportunity lies in identifying the ways in which firms & suppliers can help you better meet your organization’s business objectives, consume less, and become less expensive to serve. To read Gerard Chick’s LinkedIn post, click here. Firms create value by reducing costs, reducing waste, and improving process controls.
  2. Focus on their Strengths: What are different firms and suppliers best at? Use “requirement segmentation” as your key cost reduction driver. Which matters or phases require local knowledge? What could be offshored? To read Anupam Razdan’s and Vincent Gautheron’s slides from the Buying Legal Council Legal Procurement conference in London, click here: http://www.buyinglegal.com/formembers
  3. Phase your Goals: Divide your goals into smaller, phased outputs. Establish an agenda of recurring topics you discuss with your colleagues in Legal: e.g. in February, prepare a synopsis of what happened in the past year. In April, review Q1 and take a fresh look at your Billing Guidelines. In July, review Q2 and examine selection and evaluation processes. To read Magen McClintock’s Cheat Sheet on “How to Make Yourself Indispensible”, click here: http://www.buyinglegal.com/formembers
  4. Establish Reference Points: Develop/get access to a fully maintained rates database. Use reference points that cannot be argued (such as location and work type). Understand where the market is going, and what pressure the law firms are under at the time you are agreeing the terms of the contract. To read Nick Mirabella-Williams’ slides from the Buying Legal Council Legal Procurement conference in London, click here: http://www.buyinglegal.com/formembers
  5. Use the Right Metrics: “It’s becoming harder and harder for legal departments and law firms to ignore the useful data that modern technology can extract from the outputs that everyday operations provide. (…) Lincoln Financial Group has gone so far as to use metrics to calculate win rates. The company measured ‘wins’ by combining settlement costs with legal costs on similar high-volume matters. It discovered that the results combined with the legal costs varied markedly among external counsel. Consequently, it has started moving business to the firms with the best ‘win’ record.” To read the article “Using data to select external counsel” and other articles on legal procurement, access our article log on Legal Procurement. Click here: http://www.buyinglegal.com/articles If you have written an article on legal procurement or have read an interesting article on legal procurement we haven’t listed yet, please let me know! 

 

 

In-house lawyers are often not fans of Procurement and procurement processes, at least from the start. Many of them don’t think like business people, savings often don’t matter to them as much as they typically matter to you, and relationships to outside counsel are of utmost importance for them. Former general counsel Leah Cooper of Leah Cooper Consulting recommends ways for Procurement to win in-house lawyers over and drive improvements:

Build the relationship: If possible, sit with your colleagues in Legal and/or schedule regular meetings. Ask questions, understand their issues, learn lawyer-speak and avoid Procurement lingo. Relate and engage. Come with different options or scenarios. Lawyers are trained to argue and find fault. By showing them different scenarios they can reason about the most fitting solution and are hence more likely to embrace it. Also come to an agreement as to what is a “win”.

Be useful: In RFPs, show your skills and usefulness and do the “leg work” for the legal team. Learn what is important to them and research alternatives. Show that you are aware of their concerns and know what keeps them up at night. Use this in your approach when making suggestions for different processes, analyses or firm choices.

What else you should do:

Understand what keeps your colleagues in the legal department up at night and connect with your peers in other companies. See what path they have taken, learn from their successes and mistakes, and adopt legal procurement best practices.

Attend the next legal procurement conference in London on 9 May. Click here for the programme!