Firms Begin to Eye Pricing Analysis
First Published May 7, 2013
After a few years of collecting financial data and applying project management techniques to the legal process, law firms are beginning to dedicate resources to pricing analysis.
Firms are analyzing and strategizing on pricing in order to properly staff matters handled on alternative fee arrangements, provide a client with more cost certainty and, perhaps just as important, ensure the firm is not losing money on a fee arrangement.
"The data tells the story better than people can sometimes," said Reed Smith Chief Knowledge Officer Thomas Baldwin.
His firm and others across the Am Law 100 are hiring more people to analyze that data and link it to their project management initiatives and client pitches.
"The market pressures will require more firms to do it because clients are pushing so hard for predictability," said Edge International consultant Pam Woldow regarding the creation of strategic pricing analysts.
Woldow said she sees several job postings a week in this space as firms formalize the role. Firms are either dedicating a specific person to oversee pricing analysis or they are including the function within their legal project management departments. She said it's not about a competitive advantage, but rather competitive survival.
"It's a much more formalized role that is dedicated to do this," Woldow said. "It's a good thing. Now lawyers know there is a specific go-to person, and sometimes required-to, for alternative fee arrangements."
A group of pricing specialists from across the country have formed a group on LinkedIn and Woldow and several other sources have said the Legal Marketing Association will soon house a section dedicated to pricing analysis.
Pepper Hamilton became the latest Pennsylvania firm to delve into pricing analysis with the creation of the director of strategic pricing and project management.
For Peter Lane Secor, the first person to hold the new director position, project management and pricing analysis go hand in hand. A firm can't staff a matter without knowing how much aspects of it cost and can't price a matter without knowing how best to staff it. Luckily for Secor, Pepper Hamilton had been tracking pricing data for the past two years, giving him plenty to work with in analyzing Pepper Hamilton's pricing models and creating budgets and forecasts for firm clients.