Pricing

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Pricing of legal services impacts all aspects of the law firm:

  • law firm profitability
  • client perception of value
  • employee satisfaction
  • partner remuneration
  • the services offered
  • competitive advantage

In a changing legal landscape, with increasing demand for Alternative Fee Arrangements (AFAs), fee estimates and “set in stone” budgets, an understanding of pricing theory, profitability levers, and pricing options is integral to a successful legal practice.  But implementing any different pricing arrangement has to involve an understanding of how it can impact all the different areas of the firm.  For example, if remuneration is tied to billable hours, how will an AFA impact this?

Many lawyers struggle to respond to requests for AFAs, not understanding the pros and cons of the various options available.  Others are concerned about the profitability risk associated with non-hourly based pricing arrangements.  Our extensive experience in developing pricing fixed fee work enables us to identify the risks to profitability.

Even those operating under an hourly based regime struggle with working within budgets, and educating their lawyers about the profit margin in any pricing arrangement.

AFAs and Fixed Fee by Work Type

We work with firms to develop alternative fee arrangements that are compliant with legal profession regulations, address risks, and provide value to both the client and the firm.  AFAs can be tailored to particular matters, or whole areas of work.

A successful arrangement involves consideration of not just profitability, but process improvement, HR impacts, service delivery, and marketing and often requires change management skills.  We have worked with firms to develop fixed fee pricing arrangements for portfolios of work in litigation, personal injury, family law, insurance, banking and finance and commercial work.

Response to RFPs and Tenders

We have considerable experience in working with clients in developing tenders and RFPs, and as a result have insights into what clients are looking for in responses.  Many RFPs and tenders seek alternative pricing responses, and demonstration of innovative approaches to delivery of legal services.  From our experience in reviewing responses to RFPs and tenders, we can say that most firms do not maximise their chances of success by clearly demonstrating their skills in their responses.  Too many responses are “pro-forma” and don’t address the particular issues of interest to the client.

Many firms are uncomfortable about providing specific responses to requests for alternative pricing arrangements.  We can help you avoid the all too common response of “we offer alternative pricing arrangements and will be happy to discuss this with you on a matter by matter basis”.  Stand out from the pack and enhance your chance of success.

Pricing Training

Pricing Master class

All training is tailored to your firm and its particular issues.  Workshops cover price modelling, profitability levers, AFA options, and  defining value.  They are hands-on with a focus on a practical application of skills being taught.  In smaller groups, attendees are encouraged to bring their own files to use in the practice exercises.

Pricing Discussions

Many lawyers are uncomfortable about discussing fees and price with a client.  This class covers the importance of the discussion about fees, pricing negotiation skills, holding the value discussion and understanding when to walk away.