Client value is the key to making pricing work in a pandemic landscape and beyond
Phil Muller, Director of Legal Services at Williams Lea, joined a panel of UK law firm leaders and pricing specialists at Sandpiper Partners’ fifth annual Managing Law Firm Profitability, Pricing and Data Analytics Virtual Conference. This year’s conference focused on driving client value.
Although it was already a growing issue over the last few years, the COVID-19 crisis has accelerated client demand for the best value for money from their lawyers. In light of this, how will law firms move forward? Here are our four key takeaways from the panel:
Virtualization and outsourcing are levers for cost savings
The crisis has put pressure on law firms to increase transparency and reduce costs. Support staff, generally 30% of a firm’s overall expense, along with infrastructure and real estate, are among the cost pressures law firms were facing before the pandemic. When the crisis hit, firms took immediate action to contain costs, as voiced by those that responded to the Williams Lea sponsored, Sandpiper Partners’ instant survey.
The long-held belief that fee earners and support staff must be together in the same location to work effectively was previously a large barrier to change. This was quickly disproved when cities around the world shut down and secretaries and support staff shifted to work from home.
With onsite/virtual barriers broken down, law firms are considering outsourcing more than ever before. The numbers seen in the instant survey point towards behavioral change in legal services. In our annual survey released last year, only 38% of law firms were considering further outsourcing. This has grown to 60%.
Great data drives transparency and confidence
Great workflow creates great data. Great data creates great analytics. Great analytics inform business decisions, drive change and improve the way law firms operate. Technology plays an important part of measurement and control. Law firms need to harness technology to capture everything they do from records management to e-billing processes. Measuring how long each job took to complete, how accurate it was and subsequently identify pain points and actions will further enhance processes. Transparency and confidence in a firm’s internal data will, in turn, give clients greater confidence in their service delivery.
Extreme conditions are accelerating change
One panelist commented that before the pandemic, “work tended to get held up with senior, experienced lawyers while the junior associates, who should also be involved are side-lined” and that led to increased cost of delivery. There’s a new level of trust now and partners are letting junior lawyers run with matters. Ensuring that matters are delegated to the right level, helps clients get the best possible service at a better price. The extreme market environment is also driving process efficiency. As the panelist added, “We are actively pushing in terms of the efficiency piece, seeking alternatives in terms of legal technology and resourcing. We can sensibly deploy now to match the market and traditional behaviors will no longer sit comfortably in the new environment.”
Clients’ focus on best value will encourage law firms to improve processes
There are some subtle differences between this crisis and the 2008 financial crisis. During the financial crisis, many lawyers were nervous about approaching their clients for fear of being held to account. Now, getting closer to clients, forging stronger relationships and providing more support are helping clients navigate this time’s unprecedented challenges. This has ignited lawyers’ entrepreneurial spirit and they are improving communications and taking innovative pricing approaches to better meet client needs. This means that they need a more proactive approach to improve internal processes and efficiencies. A greater commitment to technology, innovation and working with experts can also help avoid the additional cost of onboarding, training, and software integration – because those experts can take on the heavy lifting for you.
To find out more, download our instant survey results, The Impact of the COVID-19 Crisis on Law Firm Support Operations.