On Thursday, May 16, LMANE Boston will gather for its May lunch program – “Rethinking Pricing in a Changing Marketplace” – with recent LMA Hall of Fame inductee Timothy B. Corcoran. Tim delivers keynote presentations, conducts workshops and advises legal business leaders through the profitable disruption of outdated business models. He is a former CEO, past President of the Legal Marketing Association, a Trustee and elected Fellow of the College of Law Practice Management, and a Committee Chair with the Association of Legal Administrators.
For a sneak peek at the program, we asked Tim what attendees can expect from his presentation.
What is your background with law firm business development and the pricing of legal services?
I'm currently a management consultant advising law firm and law department leaders in the profitable disruption of outdated business models. I've served as a law firm CMO twice, and I've managed a corporate marketing function on several occasions. I have also been the client's client -- meaning the business person who owned the budget used by the in-house law department to purchase outside counsel legal services. We're in the middle of a significant transformation -- from law firms dictating price to having price dictated to them; from prices substantially based on hourly billing to non-hourly billing models; from prices reflecting a law firm's cost to reflecting a client's perceived value; and more. To thrive in today's marketplace, law firm leaders have to master pricing strategy.
What do you hope attendees will learn from your presentation?
We'll cover how pricing must grow beyond hourly rates, or at least beyond "one rate per timekeeper no matter what they do." We'll talk about assessing which services have the highest price sensitivity to clients, and what price sensitivity means. We'll discuss how price is a crucial component of profitability, and how sometimes you can generate more profit by lowering your price, which goes against everything lawyers have been taught.
What is the link between law firm revenue growth and pricing strategy?
A growth strategy that doesn't incorporate price, or an understanding of what buyers are willing to pay and what alternatives are available to them, isn't a strategy, it's a wish list. Also, a revenue growth plan is usually just the first step in what a good strategy plan is designed to create, and that's profit. There are a lot of ways to boost revenue that don't generate profit. We'll discuss how price and revenue and profit are linked to strategy, and we'll even touch on partner compensation. It's all part of the same strategic challenge.
In your experience, what have you found to be some of the most significant challenges faced by firm leadership when reviewing pricing structures?
In the legal market, both buyers (in-house counsel) and sellers (law firms) have traditionally taken a pretty unsophisticated approach to valuing legal services. Both use price as a proxy for quality. The partners say, "My high hourly rate demonstrates my level of expertise relative to my peers. If you want quality, you have to pay for it." General counsel say, "I can't afford to take risks, so I will only hire the best law firms with the biggest brands, and while I know they're expensive I'll negotiate a few bucks off their rate and get the same quality." What's changed in recent years is that procurement and legal operations professionals are opening the eyes of in-house counsel to measuring quality, and linking quality to price. Buyers are more informed than they once were, so law firm leaders need to catch up. High quality does generate good profits. But increasing hourly rates are just one way of getting there, and it's increasingly an ineffective way.
Will attendees come away with actionable strategies to help overcome these challenges?
Attendees will come away with solid information and examples of what other law firms and law departments have done to successfully collaborate on pricing. Whether someone can act on this information is really a function of how receptive the law firm leaders are to learning about the economics of their clients and the economics of law practice. For those willing to listen, there are numerous actions that can be taken tomorrow that will materially improve a law firm's ability to satisfy clients while growing profit.
Register for the program here.