Law firm leaders understandably see lucrative client work as an important key to overall firm profitability. Left to their own devices, those leaders would eagerly raise rates or otherwise take steps to ratchet up the yield on work. In contrast, their clients often consider the containment of legal costs as a key component to valuable legal services. If clients were in control, they frequently would reduce rates, or seek other ways to manage down their legal bills.
While these respective objectives may seem incompatible, they don’t need to be. Hitting the sweet spot of simultaneous law firm profitability and client satisfaction is possible—it simply requires greater effort in managing the law firm/client relationship.
In recent years, some firms are learning that achieving firm profitability and client satisfaction can be aided through the use of a law firm pricing professional. The recent Thomson Reuterspaper Law Firm Pricing Insights – Value, Profitability, and What Comes Next provides an informative overview about this breed of professional and some of the successes enjoyed to date. Law Firm Pricing Insights makes the case for using pricing professionals to meet law firm financial objectives while growing client relationships and satisfaction.
It’s review of the growth, use, and roles of pricing officers at law firms is commended for your review and will not be repeated here. But it may be worth looking at five of the more practical benefits for a law firm that utilizes a substantively empowered pricing professional:
Enhances the Understanding Between Firm and Client. By already knowing the firm’s financial strategies, the firm’s pricing professional can concentrate on listening to the client to understand its objectives. Instead of acting as an advocate to convince the client that it mustaccept the firm’s financial terms, the pricing professional takes what is learned from the client to arrive at a solution that works for both sides. Communication improves understanding, the client relationship, and in many cases, financial results.
Brings a Bigger Toolbox to Fixing the Profitability and Value Conundrum. Most pricing professionals are aware of numerous ways to price legal services. With a firm pricing professional involved, creative financial arrangements can be discussed to keep the firm/client discussions from getting bogged down. The bigger pricing solution toolbox reduces the likelihood that an impasse with the client will arise.
Can Foster the Institutionalization of Clients. While working on an acceptable financial arrangement with a client, a pricing professional may see opportunity beyond the immediate engagement. Instead of the analysis being limited to a short-term pricing arrangement, the pricing professional may recognize ways the client’s fundamental requirements can be leveraged long-term. An astute pricing professional may see how it may be worth strategically investing in a new relationship in order to build a long-term one.
Let’s Lawyers Concentrate of What Lawyers Do Best. A pricing professional can free a lawyer to focus on client service. Once an acceptable arrangement between the firm and the client is endorsed by the firm, the firm’s backing may make it be easier for the lawyer to concentrate on achieving substantive results. While a priced arrangement does not excuse a lawyer from managing a file correctly, it can establish a clear understanding between firm and client that engenders the efficient delivery of client service.
Improves Lawyer Morale. Too often lawyers are told to raise their rates beyond their comfort zone. It’s not as if lawyers don’t value their own worth, but they see firsthand the impact of being priced out of the market. The firm’s desire for higher rates versus the lawyer’s desire to not rock the client boat can amp up the pressure at the firm. By moving outside the attorney rate merry-go-round, a capable pricing professional can find a solution that satisfies firm leadership, the lawyer, and the client. A busy lawyer is a happy lawyer.
More and more law firms are turning to pricing professionals to improve the client experience and financial results. Is it time your firm does likewise?