Page 137 - 2019 - Leaders in Legal Business (n)
P. 137
• Leveraging a priori matters as the starting point
• Unit pricing/procedures
Guidelines for outside counsel add another layer to the modeling process. As clients focus
on controlling costs, they may offer stipulations and conditions to firms seeking work, and these
must be considered in evaluating the profitability of such a relationship. The reality is that most
matters are still priced on an hourly basis, and the budget communicated to the client acts as a de
facto fee cap. Factor in the customary practice of giving many clients significant discounts on their
hourly rates, and it’s clear that firms have shifted the risk completely onto themselves.
To survive in a market where previous billing and pricing models are now regarded as
gentle suggestions at best, firms must harness their own data — and the technology that helps them
to effectively reshape their pricing practices — or struggle to remain profitable in a new economic
era.
122
• Unit pricing/procedures
Guidelines for outside counsel add another layer to the modeling process. As clients focus
on controlling costs, they may offer stipulations and conditions to firms seeking work, and these
must be considered in evaluating the profitability of such a relationship. The reality is that most
matters are still priced on an hourly basis, and the budget communicated to the client acts as a de
facto fee cap. Factor in the customary practice of giving many clients significant discounts on their
hourly rates, and it’s clear that firms have shifted the risk completely onto themselves.
To survive in a market where previous billing and pricing models are now regarded as
gentle suggestions at best, firms must harness their own data — and the technology that helps them
to effectively reshape their pricing practices — or struggle to remain profitable in a new economic
era.
122
