Modern Law Magazine Issue 69

INTERVIEWS
Many will already be familiar with it with phrases such as
“reassuringly expensive” - the presumption that, given a range of
transparent choices, the most expensive is probably the best.
One of the most tragic things we see is firms doing a brilliant job
through all their marketing and business development initiatives of
positioning themselves as the ‘Fortnum and Mason’ of the market
and then pricing themselves as ‘Tesco’s’. There is little appreciation
of the damage this does to the firms pricing power and wider
reputation in the market.
In what ways does transparent and clear pricing
Q contribute to a positive client experience, and how do
you recommend law firms achieve this transparency?
Lack of price transparency surfaces as a major client concern
A in just about every survey or opinion poll, so there is clearly
plenty of room for improvement.
It is an area in which we let ourselves down and which specialised
legal pricing platforms like Virtual Pricing Director® overcome
by being able to provide clients at the outset with a very clear
articulation of what the firm is going to do, what they aren’t going to
do, who is going to do it, when it be done and what it will cost.
You know you’ve got it right when the response from a client to your
proposal is something like, “I was surprised at how much this is
going to cost, but I didn’t appreciate quite what was involved”.
But that is only half the job. As I mentioned earlier, continuous
communication about the costs should be maintained throughout
the life cycle of the job, particularly at the point where you become
aware that the cost is going to be more than the client anticipated.
How does pricing consistency across various legal
Q services enhance client satisfaction and trust in a law
firm’s brand?
Firms must find a way to balance two considerations.
A The first is that your pricing sends a powerful message to
the market. It tells the market something about you. Pricing acts
as a signal to the market, conveying information about the firms
positioning, quality and target client base. As I said earlier, price as a
heuristic is a powerful proxy for quality.
The second consideration is the reality that clients attach different
importance and value to different practice areas and different work
streams. They also see some areas of legal work as relatively
commoditised so they are more price sensitive, and other areas of
our work that they see as being ‘brain surgery’ which they will have
to pay a lot more for.
It is a real challenge for firms to understand and reconcile this
dichotomy in a way that amplifies and enhances the firm’s brand
rather than damaging it.
What role does pricing flexibility play in accommodating
Q the diverse needs and financial capacities of different
clients throughout their journey?
The ability of partners to credibly canvas a range of discreet
A pricing strategies and techniques to cater for the very differing
needs of clients is a mark of real pricing maturity in a firm. We refer
to it as a ‘menu’ approach – “I have all these pricing techniques
that I can offer you depending on what your priorities are - speed,
thoroughness, cost, resourcing experience/seniority, your appetite
for price risk sharing etc. Each has advantages and disadvantages.
Which would you prefer?”
Few of us would find a restaurant with only one item on the menu
particularly appealing and yet most legal work, despite some
assertions to the contrary, is still offered on an hourly billing basis
only.
Every few years there is a clarion call for the ‘death’ of the billable
hour. But I have never understood why. I think it frames the issue
incorrectly. Just because some people don’t like fish, you wouldn’t
see a restaurant taking fish off the menu. Everyone knows what
the advantages and disadvantages of the billable hour are, but in
some circumstances, it is simply the least unattractive pricing option
acceptable to both the law firm and the client.
Removing it from the discussion also pointlessly precludes a hybrid
approach where different pricing methodologies are applied to
different phases of a piece of work depending on the price risk
profile, which we know can be very helpful in reaching agreement
with a client.
The correct approach in our view is to upskill partners to confidently
offer clients a broader ‘menu’ of pricing options, only one of which
is hourly billing, enabling them to have a much more mature
and nuanced pricing discussion with the client. We have been
advocating and teaching this successfully for over 20 years.
How do you advise law firms to effectively communicate
Q pricing structures to clients in a way that builds trust and
minimises misunderstandings?
I have already touched on the issue of communication, but it is
A certainly worthy of reinforcement. I think it can be summarised
in a few simple steps…
Listen carefully to the client for clear insights and clues into their
pricing priorities.
Provide a very clear client-centric explanation of the scope,
assumptions, exclusions, and cost. Don’t just do it in writing, talk
them through it, removing the potential for misunderstanding. The
time spent doing so at the front end will often negate the need for
more time-consuming and difficult conversations at the backend.
”
”
Upskill partners to confidently
offer clients a broader ‘menu’
of pricing options
Maintain a continuous flow of cost communication throughout the
life of the matter, particularly in the event of scope creep and cost
blowout.
This will all sound very basic to any moderately experienced
practitioner, but when it comes to client satisfaction and trust there is
considerable mileage in doing even the basics well.
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