Melissa Prince’s position at Ballard Spahr is chief client value officer. But it took a while for her to get regular interaction with clients, let alone to get the word in her job title.
“There are some partners now that trust me with the client,” Prince said. “Some partners who are still old-school, I’ve had to take baby steps with. I’m having multiple interactions with clients on a weekly basis now, which I wasn’t having before.”
After three years at Ballard Spahr, Prince was promoted to her current, newly created position at the beginning of the year—part of a growing trend of law firms implementing client-centric C-suite roles. These positions often start out focused on pricing, but have grown to encompass some business development and even legal project management functions.
“I’ve seen a complete evolution,” Prince said. “There’s much more of a push for law firms to be seen as businesses … that’s going to have a huge effect on what we’re doing.”
More Than Just Rates
Prince said her role was implemented at the beginning of the year. She had been pushing for a client-facing title, she said, to describe work she was already doing.
“It started out as being really focused on strategic pricing and legal project management,” Prince said. But what has emerged, she said, is more focus on the legal services process and how to quantify that.
“Our team has been much more involved than what you would typically perceive as a pricing role,” she said. It involves staffing, compensation and close familiarity with client relationships.
“Client relationships is about more than just rates,” Prince said. “It’s about knowing and understanding that client.”
Linda Novosel, chief client value officer at Steptoe & Johnson, said her title also changed in January to better describe the responsibilities she had taken on. Her previous title was chief pricing and legal project management officer.
Novosel recalled an interaction with a general counsel that preceded her title change, who said, “‘That title … tells me you’re looking to maximize profits for the law firm.’”
“We don’t just focus on profitability. Our goal is to improve the value we’re offering to our clients and to meet them at the place they need us to be,” she said. “We needed to change the perception.”
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Bree Johnson, chief strategy, pricing, and legal project management officer at Robins Kaplan, joined the firm in November in a newly created role. By adding “chief,” she said, the firm is recognizing that the firm’s institutional clients want such a role with authority.
Johnson said she meets often with the firm’s top clients—weekly with her operations counterparts in those legal departments.
“Pricing and legal project management should go hand in hand … then you manage the entire matter lifecycle,” Johnson said. “I love bringing the voice of the client into the law firms.”
Novosel, similarly, said she’s the “internal client voice” at her firm. She spends about 30 percent of her time working with clients to understand their objectives, and about 70 percent with partners, training them on how to work with clients.
These roles are arising as clients become more vigilant about spending on legal services, and as law firms seek to maintain their profit margins under that rate pressure.
“Clients are asking more, they want a better sense on the estimate of the fees and a sense that we will manage it,” Johnson said. Robins Kaplan, given its emphasis on litigation, does a lot of work on an alternative fee or contingent fee basis, she noted.
“Our clients want the law firm to be more of a partnership—not just on the legal issues, but also on the business issues,” Johnson said.
Novosel said general counsel have become more sophisticated, and the clients have buying power like they haven’t before.
“Traditionally, lawyers would just open the file, take a look at it and start working on it,” she said. “That has changed. We need to be collaborative with our clients.”
Before she took on the client-facing role, Novosel said, it was difficult to know whether lawyers were meeting their clients’ expectations. And that’s not just a matter of dollars and cents. A large part of her role is improving the processes that lawyers use, and making it more efficient for the client’s needs.
There’s been an evolution in how law firms look to make money too. Prince said at Ballard Spahr, that involves an increased focus on making the right arrangements, rather than collecting on billed time.
“We’re much more focused on profitability. We’re not looking at realization at all anymore almost,” she said. That requires intentional team formation, Prince said, where overhead costs for each lawyer and professional are taken into account.
“If you have too much partner time and you don’t need partner time on the work and the client wants you to cut costs, the first place to look is at the team,” Prince said.
The arrangements Ballard Spahr offers haven’t changed much, Prince said, but they’ve been increasingly utilized.
Prince, Novosel and Johnson said they have noticed more lawyers at their firms embracing the client value function, particularly when they see how the clients respond.
“The client’s eyes light up … the attorney at that point gets it,” Johnson said.
Prince pointed to a particular Ballard Spahr client as an example. Two years ago that relationship involved “a nominal amount of work,” but the firm sold its pricing and project management capabilities to the client, she said, and the fees generated by the relationship increased substantially.
“What’s amazing about that is there are areas where they had deeply embedded local counsel,” Prince said. “We’ve been able to be competitive with the small law firms.”
The proof is also in the growth of client-facing roles, Novosel said, as illustrated by attendance at the Legal Marketing Association’s P3 conference, aimed at “pricing, project management and process improvement experts,” which is in its sixth year. There were fewer than 100 attendees at the first P3, Novosel said, but that has increased by five or six times.
“There’s a proliferation in these roles,” she said.
A ‘Tipping Point’
There’s another kind of pressure involved in the growth of client-facing roles, Novosel said. Law firms have competitors coming from more directions than ever.
“We not only have law firms, but we also have these alternative legal services providers, accounting firms … that are able to provide unbundled legal services to clients at a much lower cost,” she said. “The increased competition requires law firms to respond.”
Johnson said she’s seen a major increase in attorney requests for her help, driven by client demands. The next step, she said, is attorneys seeking out her resources before the client asks for it.
The legal industry is at a “tipping point,” Johnson said, with regard to using data to make decisions. She said there will likely be more high-level client-value roles created in the next few years.
But there may be some tension, she noted, as law firms seek to control the expenses involved with nonlawyer C-suite functions. The client value functions may ultimately come to life in a retooled CFO role, she said.
Prince said mastering the client value function is a key to survival now, as unlimited rate hikes are no longer an option in maintaining profitability.
“I think we’re going to see very rapidly in the next few years very large firms disappear if they can’t figure out this model,” Prince said. “I’m sure this role is going to explode.”