People, process and technology. That's the slogan of the Ark Group's annual Law Firm Profitability Summit. And with a name like that, it was inevitable that Clocktimizer would get involved! This year's edition saw a fantastic range of topics, covering both the challenges and the opportunities that a year in lockdown have created. Our CEO, Pieter van der Hoeven, also joined in a panel discussion looking at 'How finance teams can become the business partners of lawyers'.
Unsurprisingly, there was a wealth of tips, advice and learnings shared over the two day event. For those that couldn't make it, we have put together a handy wrap up of all the best bits. We also want to reiterate a huge thank you and congratulations to the organisers and panelists for such an informative and enjoyable few days!
So can finance teams be business partners?
Whether or not the billable hour is slowly being phased out, firms are approaching matter pricing with increasing sophistication. However, there are still challenges in the way pricing and finance are structured internally. Which begs the question, 'How can finance teams become the business partners of lawyers?' This tough question was the one tackled by our CEO Pieter; alongside Tom Jones, CEO of Iridium Technology; Kathy Hall, CFO of Winstead PC; Jessica G. Gichner, Chief Value Officer of Pillsbury Winthrop Shaw Pittman; and Matt Finke, CFO of Thompson Coburn.
Throughout the session attendees were invited to take part in a series of polls covering the current state of finance integration in firms. Interestingly, the polls often showed a variety in answers and integration. Interestingly, the first poll showed a fairly equal split between those with a dedicated pricing team (32%), those who get help from finance teams sometimes (34%) and those without finance guidance on matters at all (32%).
All of the panelists currently have either dedicated, or integrated pricing teams. However, as Pieter noted, this may be beyond the reach of smaller firms. At Clocktimizer, we see that those unable to leverage a full team are instead capitalising on technology to support and expand the reach of pricing individuals.
Whether large or small, every panelist highlighted the importance of pricing and finance in improving both a firm's bottom line, and in improving customer satisfaction. A later poll further supported this, with 50% of the audience having seen a positive impact on their firm's profitability as a result of pricing.
Techniques for avoiding unnecessary discounts
But one of the key takeaways of the panel was in addressing what to do when non-pricing specialists hand out discounts. 24% of respondents said that their attorneys were offering discounts 'all the time' with a further 38% indicating that this happens 'sometimes'. Because the majority of these discounts are offered by non pricing specialists, it can mean they are given without sound financial data to back them up. So how can firms encourage their attorneys make the most of pricing teams? The panelists shared their best pitching tips:
- Highlight that you are taking unenjoyable work off their hands:
- 'You went to law school cause you don't like math, so let us do the math!'
- 'We can free that time for you to focus more on other business'
- Emphasise that pricing is a value add, with more data:
- 'We developed this budget together, we will support you with the reporting, and check how it is going'
- Celebrate the wins:
- 'When a Partner comes to us for an RFP, we build a proposal and focus on this partner to celebrate him in front of everyone'
Finally, our panelists also covered some tips on how to introduce a system of checks and balances to prevent unnecessary discounts from slipping through. According to the poll, firms already have a wide variety of rules in place:
However, too many rules can also be a problem. According to Jessica, firms would be well advised to focus on priorities. In doing so, attorneys are given more freedom and are more likely to both remember, and adhere to, the bigger goals. Pieter also mentioned the ability to think beyond financial thresholds. If your firm is unfamiliar with IPOs, then make sure that any IPO work must be first looked over by a member of finance or pricing.
Key takeaways on partnerships for transparency
One of the key themes present throughout the event was 'partnership'. Obviously the client push towards transparency has created a more equitable risk sharing arrangement with clients. Law firms are increasingly working in a data-sharing manner with their clients, considering their long term business aims alongside the current matter.
However, the event itself also showed that the importance of partnerships is being increasingly internalised. On our own panel, it was clear that partnerships between pricing, BD, and attorneys is essential for the financial success of the firm. In the closing session, we learned about the strategic importance of partnerships for client value. Even panels covering the positive impact of Covid looked at the importance of consultation, communication, and trust in improving remote working for employees.
Technology is about iteration
There were a number of informative sessions covering the ways technology had supported firm profitability over the last year. What was clear about every session was the importance of iteration. A term familiar to most tech lovers, iteration is a recent arrival at law firms. The principle follows that instead of designing and releasing a program after years of development and in its 'final form', developers make and test constantly. In this way assumptions are constantly checked, and 'waterfalling' (or compounding invested time and resources) is avoided.
Almost every session followed the approach of first identifying a problem, and then developing a process of constant consultation with the user group to test solutions. It was refreshing to hear the adoption of this approach. Not least because it is one already favoured at Clocktimizer, but also because it dispels many of the challenges tech faces in the legal industry. Namely, that it is expensive, or slow-moving. Clearly, not any longer!
It seems that a year in lockdown has actually done quite a lot. Clearly, the pandemic has been incredibly hard for many. However, it has also offered an opportunity (and driving force) behind increasing client transparency. Not only have firms embraced a more structural approach to pricing and client value, but they have done so with clearer goals. Communication and iteration have improved pricing and profitability incrementally each day. As a result, the consequences are becoming visible a year on. With that said, it looks like firms are moving from implementation of efforts, to scaling them!
We like to thank Ark Group for organizing another fantastic edition of the Law Firm profitability summit, and we are already looking forward to next year's edition!
Posted in Foundation