How Pricing and Business Development Intersect
Pricing can be an unnerving topic leading to awkward conversations. For many people in the legal services field, there’s a notion that if they close their eyes, this topic will go away. If only ignoring it was that easy.
Law firms aren’t charities; they need to make a living. They and their clients know that. That’s why it can be helpful to understand how pricing intersects with business development.
Last week, a panel of lawyers spoke to the Toronto chapter of the Legal Marketing Association on the topic of the Canadian Bar Association’s 2014 report, Futures: Transforming The Delivery Of Legal Services in Canada. They ended the session by talking about money.
With respect to changes in how legal services are valued, there was an observation that procurement and large-size legal departments will be factors so marketing and business development professionals need to know about pricing. There was also an opinion that strategic pricing talent should be handling RFPs and that pricing will be a weapon along with streamlining processes.
These tactics aren’t new. They’re indicative of the global viewpoint on legal services pricing and confirm that the push for change is continuing to come from clients.
As an illustration, a few weeks ago an article that appeared on lawyersweekly.com.au explained why Australian bank, Bendigo and Adelaide, will no longer engage with firms that don’t offer value-based pricing and how it’s tackling this issue. While the Bank had considered transferring work to firms that already offer pre-pricing and value-based pricing, the in-house legal team decided it was worth the effort to help educate and incentivize firms with whom the Bank currently has a strong working relationship.
That’s a gracious and smart move on the Bank’s part, and any firm that wants to continue to do its work should be expected to respond accordingly.
But who at a law firm should be involved in pricing? This is exactly where a three-way intersection lies between the firm’s business development professionals, its lawyers, and the client.
In its purest sense, marketing is about heightening profile while business development is about nurturing relationships. Because marketing is inherently about “push” and business development is about “pull”, many of the world’s largest law firms organize their marketing people and business development people into separate yet related teams. The same is true of global accounting firms.
While this silo strategy works well for very large law firms with deep talent rosters, there is no reason why, working alongside a client’s lead relationship lawyer, business development professionals in any size firm should not be project managing and pricing legal services using standard project management tactics.
At a high level, this essentially involves scoping work into its component parts, such as from complex to commodity; assigning talent ranging from lawyers with particular expertise to execute specific pieces of the legal work to paraprofessionals handling the more rote work; plus determining deliverables, assumptions, risks, milestones, timelines, reporting protocols, and cost.
Ongoing shifts in the delivery of legal services provides business development professionals with opportunities to play more critically involved client-facing roles provided that their firm has the good sense and smarts to include them early in the pricing process and aligns their efforts to the firm’s financial wellbeing.
As the legal world rapidly evolves, it can fully be expected that business development professionals will become operational project managers. The firms they work with will be among the most enlightened and reap the benefits.
That’s because change affords advantage and fortune favours the audacious.