Move over Patrick on Pricing’s roll call.
Law firm pricing professionals have a new directory and it carries with it an accreditation that a group of industry veterans hope will “professionalize” the relatively nascent role of bringing pricing legal matters.
The True Value Pricing Institute currently lists about 45 pricing pros on its site as having obtained ALPP, an accreditation acronym for Accredited Legal Pricing Professional.
The accreditation is meant to be difficult to achieve, and, unlike some accreditations, the ALPP can be taken away. To hold the designation, candidates must be employed as a pricing professional and spend 60 percent of their time dedicated to legal pricing. Those professionals must have at least three years’ experience at a manager level or one year of experience as a “chief” or “director” of pricing.
Then there’s the curriculum. The accreditation requires 32 “educational credits,” which are not provided by the True Value Pricing Institute, but rather endorsed by it. Those credits can include reading texts on pricing; speaking at industry events; or participating in a group study-style course through the institute.
The current list of “ALPP-ers” is dominated by employees of the world’s largest firms, including Baker McKenzie, DLA Piper, Morgan, Lewis & Bockius and Ropes & Gray. But it also includes professionals from smaller or regional firms, such as Nashville-based Bass Berry & Sims; Dallas-founded trial firm McKool Smith; and the Carolinas’ Nexsen Pruet.
Steven Manton, a leader of the True Value Pricing Institute and director of pricing and matter management at McDermott Will & Emery, said the new ALPP accreditation is a way to professionalize the role of pricing directors in law firms.
“When any new skill set emerges in a marketplace, the first few years people are fumbling around and they may do some informal things, but this is a formal way [to educate pricing professionals],” Manton said. “And we’re rewarding them with a recognition. Those who are really at the top of the game have a distinction.”
It is a long way from the first directory of pricing professionals, which was curated by Patrick Johansen, a longtime legal pricing expert who has worked at Seyfarth Shaw, Reed Smith and now Kobre & Kim.
Still, those professionals may face some of the same challenges as law firms adopt pricing strategies—beyond discounts—in fits and starts.
A survey this year by legal consultancy Altman Weil Inc. found a wide dispersion of the number of firms that are engaged in various pricing strategies. Furthermore, it was unclear if those strategies were always successful.
For instance, the strategy that was said by the highest number of firm leaders (57 percent) to be effective was only used by 40 percent of large firms. That strategy was setting margin goals for practice groups or the firm. The most widely used tactic, collaborating with clients on alternative fees (done by 77 percent of firms), was said to be effective by 44 percent of firm leaders.
But pricing directors can take solace in another metric: 73 percent of large firms have hired a pricing director; and 54 percent said those individuals are effective.
John Ferko, chief operating officer at Delaware-based Richards, Layton & Finger, said one way for firms to tell if there is a role for a pricing pro at their firm is to ask if clients still get upset at the bills that partners send them.
“How many times does a client look at a bill and is mad, confused or surprised?” Ferko said. “As long as that is happening, that means the lawyer and the client did not have an understanding of what was going to be done, what the value was—and they weren’t communicating that value or the changes in the case along the way.”