This is the second of a two-part series examining the emerging role of pricing directors in law firms. In part one, five critical attributes that define a great pricing director were discussed, and top leaders in the movement were interviewed for their perspectives. In this segment, Susan Hackett talks to pricing directors about practical implementation of a law firm pricing strategy: professional skill building, collaborative leadership teams, promoting behavioral change, client involvement, and more.
Id like to tell you that Ive got it all down, but every day, Im making it up as I go. For larger law firms and their executive leadership, this is new territory. So says Toby Brown, director of strategic pricing and analytics at Akin Gump, and the designated leader of an emerging group of law firm professional staff whose practices focus on creating pricing strategies that drive greater (and more businesslike) alignment between firm profitability and client value.
Getting It Done
So how do you get it done? Lacking turn-key tech applications and facing a bunch of smart lawyers whove always done things differently, just where do you begin as a pricing director to garner some important first successes and then build steam? The pricing directors with whom I spoke offered these six strategies for those who are working their way through the maze of moving from pricing based on revenues generated through rates and hours toward pricing based on client value and firm profitability.
1. One Size Fits One
Doug Woods is a former forensic accountant who is now the pricing and data analysis manager for Ogletree Deakins.
Woods was fresh to law firms and legal pricing about a year agohis background is as a CPA and an accounting-firm marketing director. To prepare for the challenges facing him with his shift to law firms, hes been reading as much and as fast as he can to garner new ideas and perspectives. Woods says the core of his focus is on helping lawyers understand that non-hourly pricing isnt evilin fact, it can be a competitive advantage. Value-based pricing is what he wants his lawyers to think about, since it requires up-front analysis, and advance conversations with clients that focus both the client and the firm on defining value and setting expectations before work begins.
Woods believes that in setting a strategy and course, its important to remember that firms considering pricing strategies in todays market may see different approaches and set different goals based on their brand, niche practices, and position in the national legal market: firms with a national or international practice may wish to drive different practices than firms with a strong regional presence; firms offering a wide array of services may wish to distinguish themselves differently than firms with a strong reputation in only one practice specialty. Woods focus is on helping his firm consider how to price and structure fees and service that will attract clients shopping for services in his firms leading practice specialtyemployment law.
As Woods puts it:
We work in a crowded field of employment lawyers and competition for clients and work is tight. We didnt want to become the How low can we go? lawyers, so we began looking at alternate pricing structures so that we could offer clients more value. We believe that clients arent necessarily looking for cheap: they just want value for their spendefficiency, results, and predictable costs. Thats what Im here to help drive.
