I attended a very engaging panel discussion last week at the Marketing Leaders Summit organised by the Lawyer around Pricing vs Value.
The panel consisted of Adam Soames (Global Head Of BD & Strategy at Hogan Lovells) Laura Nicholls (Global Head of Client & Market Development Financial Markets at Clifford Chance) David Dunn (Legal Operations Manager at Herbert Smith Freehills) and Adam Al Shaybany (Head of Pricing For EMEA Client Value at Reed Smith) and it was really interesting hearing their ideas and stories on the subject over the last few testing months. I have summarised below, most of the key points that came out of a lively discussion.
When asked about recent pricing trends the following points were made in terms of law firms clients:
- Clients are looking to negotiate a lot harder but they also want the best fee earners and law firms to help them navigate complexities.
- This has led to more flexibility at law firms with an increase in CAP fees, some discounts, extended payment terms, accelerated invoice payments and broader relationships. Trust is still a major work in progress.
- In turn, there has been an increase in knowledge sharing, transparency and efficiency. A knock-on effect has been greater collaboration internally with finance teams.
When asked about the death of the billable hour the following points were discussed:
- Alternative fee arrangements account for 50% of all transactional work in the financial and capital markets industry for Clifford Chance.
- It is difficult to change the traditional model entirely as the billable model has been around for 150 years. It is more about thinking of a client-centric approach.
- Law firms need to drive the change and should be proactive with AFA's.
Where should pricing sit as a function within a law firm?
-It shouldn't really matter but should touch upon various areas including BD and marketing. Accounts and finance teams should also be involved so that there are champions all around the business.
- Collaborating internally is key and law firms should never let their pricing be dictated by internal limitations as this isn't in the clients best interests.
-Pricing Pilots are a good way forward but they must have senior buy-in and clear rules of engagement. Clifford Chance has recently completed a very successful pilot in the middle east.
- Machine Learning and data can be harnessed to bring transparency but also decrease proposal turnaround times. At HSF, they are doing this successfully with their UK litigation team with a new tool called HSF Jigsaw
A lot to think about for both clients and law firms.