Pricing Report 2018

 

The pricing function is still fairly new in the legal sector, but its fast development as a standalone discipline is a particularly notable shift of recent times. While law firm management teams may be aware of the rise of pricing teams, it is more of a challenge to understand exactly how pricing departments have developed so far and what team structure and recruits make for the best firm-wide pricing capabilities.

That is why we are now publishing this Pricing Roles in the Legal Profession 2018 (to obtain a copy see details below), which takes our front-line experience placing pricing specialists and building pricing teams, to explore:

  • The kinds of candidates who make the best pricing specialists
  • Chief responsibilities and purposes of pricing roles at different levels of seniority
  • The structure and make up of pricing teams in variously sized firms
  • How such pricing functions should sit and operate within the broader legal organisation

We are publishing this report at a time when influence and demand on business service professionals in corporate law firms over the past decade has resulted in a significant evolution in the breadth and types of business roles in law today. As well as enhancements and refinements of traditional departments such as Business Development, Marketing, HR, IT and Finance, firms have also seen the development of new areas of business services: Knowledge Management, Risk & Compliance, Strategy & Innovation and Legal Project Management are now all recognised departments in many of the larger law firms.

Spotlight on pricing

 

But the growth of pricing particularly stands out – perhaps because getting pricing right remains a critical challenge for the legal profession due to the fast shift towards alternative fee structures. According to PwC’s Law Firms’ Survey 2017, rates are under sustained pressure with alternative fee structures accounting ‘for more than a quarter of work in top-25 firms’, and significant gaps remaining in ‘pricing behaviours versus desired practice’.

Hardly surprising then, that the recruitment of pricing specialists is gaining traction across a significant part of the top-20 UK law firms. This development is now being emulated by smaller firms too, with a growing number of businesses outside the top 20 beginning to explore how to set up a pricing function.

Highlights of recent activity in legal pricing include:

  • In 2017, six UK law firms with turnover of £200m+ created new Head of or Director level roles which included pricing in the job’s title.
  • Thirteen of Legal Business’s UK top-20 law firms now have members of staff with titles including Pricing Director, Head of Pricing, Pricing Manager and Pricing Analyst.
  • In most cases, the other seven firms which don’t have specific pricing titles, do have an individual or individuals that undertake pricing as a predominant part of their responsibilities. So even if they haven’t been labelled as Pricing Manager they are de facto the firm’s pricing specialist.
  • Outside of UK headquartered law firms, of the six international firms with 200+ lawyers based in the UK, five have a pricing specialist or specialists.

Our report takes readers through these developments and goes a long way to answering many of the questions law firms frequently ask us on successfully setting up and developing a pricing function.

If you would like to chat through any aspects of pricing in law and receive a PDF copy of our Pricing Roles in the Legal Profession 2018, please contact Martyn Draper, who is Head of our Finance Division at Totum. He can be contacted at [email protected]

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