Law firm pricing and profitability: a case study Ben Winstone A USTRALIA B ELGIUM C HINA F RANCE G ERMANY H ONG K ONG SAR I NDONESIA ( A SSOCIATED O FFICE) I TALY J APAN P APUA N EW G UINEA S AUDI A RABIA S INGAPORE S PAIN S WEDEN U NITED A RAB E MIRATES U NITED K INGDOM U NITED S TATES OF A MERICA
Backdrop • More sophisticated GC/in-house legal • Continuing price pressures • Lack of pricing/profitability expertise • Competing interests • Appetite for change
Case study • FTSE 100 client, multi-million pound spend – Price sensitive – New GC – Strategically important • Structural alignment • Wide range of work • Old menu pricing
Approach • Transparency • Analysis – Profitability by matter type – Mix – Process • Future offering – Outsourcing/out-tasking – Internal structure – Price
Findings • Existing price and delivery costs not sustainable • Reducing volumes coupled with more commoditised mix – previous pricing outdated • Commoditised work was as cheap as regional competitors • Varying operational process affecting commoditised work • Differentiated work priced correctly
Solution • Solus position • Spend to remain broadly the same on projected mix • Identifying and process mapping all work that could be delivered below associate level • Set up low cost delivery hub • Tighter internal controls • Regular review of arrangement
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