This is the third installment in a series of blog posts about our on-going webinar series, Building the Pricing Machine, which aims to provide valuable insight to law firms on all elements of their pricing process.
The voice of experience has advantages and disadvantages. Interestingly, in some cases a particular attribute can actually fall into both camps: being around a long time gives you the advantage of having seen and learned a lot; but it can also lead to people (including yourself) assuming you know more than you do.
With that in mind, we attempt to offer here, and in our upcoming webinar, Building the Pricing Machine: The Voice of Experience, a few thoughts that will hopefully help pricing professionals of all stripes in the legal space.
Advice to Newcomers
There is a learning curve — don’t fight it, but don’t let it slow you down either. Take time to understand the dynamic drivers of the firm. Learn the culture and nurture relationships with key business units, such as marketing, business development, IT, practice group leaders and department chairs, and financial analysts.
When it comes to the attorneys, learn who are the rainmakers, what are their practices, and who are their clients.
Get a handle on the portfolios — budgets, alternative fees, emerging company programs, matter meta data, and more. If some of those measurements are not in place, start to build them. You will accumulate lots of data quickly.
You can hear a recording of the Dec. 4 webinar, The Voice of Experience, featuring Peter Lane Secor of Pepper Hamilton, and Bill Josten of Thomson Reuters here.
Network. There are several great organizations out there you should consider joining. The communities you’ll find within the Legal Marketing Association’s P3 Conference, the International Legal Technology Association, the Association of Legal Administrators, and the True Value Partnering Institute can be invaluable as you confront issues for the first time. You’re far more likely to find someone who’s been through what you’re currently experiencing if you cast a wide net.
Essential Tactical Considerations for Effective Pricing
Law firm pricing professionals of all level of experience will benefit from getting certain ducks in a row.
You have to understand what your “must have” data is. We call it Diary-to-Grave Analytics. You have to understand what data your firm captures at the intake stage. How competitive is your rate structure? How are billing write-downs and accounts-receivable write-offs handled? What about initial rate discounts? Are there policies and procedures in place to govern these?
You also need to understand how your firm analyzes profitability. If there is no formal profitability analysis in place, you need to work with firm leaders to help implement one. It is a key tool not only to the power of the pricing role, but to the broader success of the firm.
What Every Good Legal Pricing Professional Needs to Know
If there is one important idea to keep in mind, it’s that, honestly, it’s there is some SWAG involved… but it is educated and experience-driven SWAG.
Here are some tips:
- You need to have a customer service mentality, both towards your internal customers and external customers.
- Get into the trenches. Learn the detail of how engagements work. There is no magic button, and you need to be honest about what you do and don’t know. For example, do you know what goes into an export report? Or, how to the handle due diligence on a transaction? It’s okay if you don’t at this point, but the faster you learn and the more questions you ask, the more effective you can be at your job.
- Know that there is art and science to budgeting. You must have the data and skill to create accurate budgets, of course, but there is an art to combining the data with the understanding of the matter structure that creates the end-result that goes to the client.
- Make sure you become part of the approval and review process. All the strategies in the world don’t matter if you have no way to ensure their implementation. For pricing professionals, that means being part of the review process.
- When you have a discussion with a business unit head or a partner, meet on neutral ground. This puts everyone on a level playing field and allows for an uninterrupted focus on the issue at hand.
- Don’t be a know-it-all. Attorneys by their nature are very intelligent and you need to listen and learn. You’ll find more success by applauding their efforts rather than by criticizing.
- And perhaps most importantly, do what is asked of you in the format requested, but bring your skills to bear in order to provide additional input and value. Take a “yes, and…” approach. You want to be an asset who can do not only what the attorneys at your firm think they need, but you can also help them find the things they may not have even know they need. That is one of the most valuable things you can provide to the partnership at your firm.