This is live blog post from the Ark Group’s Managing Partner’s Law Firm Pricing & Profitability Conference. Stuart J T Dodds, Director, Global Pricing, Baker & McKenzie Global Services discusses Navigating the Pricing Maze: Establishing a Pricing Capability/Function within Law Firms. [Please forgive any typos as I will post this as session ends. This post captures only certain highlights of his talk; I have Tweeted some other comments he made.]. 

Baker & McKenzie pricing and delivery framework:

  • ‘Set’ the price: pricing and agreed fee approach
  • ‘Get’ the price: value proposition and negotiation
  • ‘Manage’ the price: ability to manage and delviery approach
  • ‘Review’ the price: opportunity to improve service or margin

Stuart has seen more emphasis on Set and Manage so far but focus is shifting to Get and Review.

Where should law firm pricing function sit in the organization. Stuart is in Marketing, which lets him become engaged earlier in the intake process than if he sat in Finance. But says there is no one right answer for where pricing should sit. But all functions – finance, marketing, KM, strategy, and other staff departments – must coordinate on pricing.

Highlights the rising role of law firm knowledge management (KM) professionals. The KM teams are best positioned to help firms how to drive costs lower, do the work better.

Stuart is spending more time on legal project management now. Pricing is ultimately set by the market, so the firm cannot control it. But the firm can control how it does the work, which is in the firm’s control (and can drive profitability).

The essential skill set for pricing:
1. Very strong communication and stakeholder management skills
2. Commercial and entrepreneurial
3. Analytically strong
4. Intellectually curious
5. Not scared of technology

Getting started with law firm pricing:
1. Ensure strong and active leadership support
2. Start with specific product areas or relationship managers first
3. Set measurable objectives for the role (e.g., at the practice or client level)
4. Start potential initiatives with some current clients
5. Get some early wins
6. Capture and review the results, learn, communicate, and improve

In summary:
1. Doing nothing is not an option – it’s too important to ignore
2. Ensure organizational buy-in
3. Have at least one person own or support the pricing process
4. All the function to evolve – don’t try to do all at once
5. Do something.