In response to client demands for predictable legal fees, corporate law firms are rethinking how they price and deliver legal services and are exploring Alternative Fee Arrangements (AFAs). The LMA Capital Chapter program on Monday, April 26, focused on how legal marketing/business development professionals can be involved in legal services pricing conversations.
These issues were addressed by speakers Aleisha Gravit, CMO of Akin Gump, and Mary K. Young, Partner in the Zeughauser Group. The topic is clearly on LMA members' minds as the event was oversubscribed. Attendees included legal marketers at various stages of their careers, including senior legal marketers. In a strong question period, the audience directed questions to the panelists about their ideas and strategies regarding client-focused, win-win pricing approaches.
The program's key points relating to legal pricing's role in the marketing mix include:
- Pricing is a very important part of a law firm's marketing and business development plans because it has a big impact on clients, and it relates to competitive intelligence and branding strategies.
- Clients are pushing for discounts more than ever; alternative fee arrangements can be a win-win alternative to discounts, because they can be cost-effective for clients and profitable for law firms.
- Clients want law firms to propose AFAs, not the reverse.
- Law firms are just beginning to figure out how to create and manage AFAs internally; historical cost data at the matter level is key to creating accurate cost estimates and managing the matter profitably, but firms often are not capturing data at that level.
- Marketing and business development professionals should be part of the process of creating and implementing pricing strategies and can be a catalyst for helping their firm to figure out how to better create and manage AFAs.
- Firms that are able to lead in creating and managing AFAs innovatively and profitably will have a competitive advantage.
Program materials can be accessed here.
By Helena Lawrence, marketing project manager with Sutherland Asbill & Brennan LLP, for the May/June 2010 Issue of the Capital Ideas Newsletter