Law Firm IPOs: Pricing on a Wing and a Prayer

Back in June 2017 I wrote about the views of Jon Molot, Chief Investment Officer at Burford Capital on BigLaw partnerships, their (lack of) capital structure and the deleterious effects of short-termism.

At Validatum, we usually begin our Partners Pricing Masterclasses with one of the most evocative of Warren Buffet’s quotes, “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”

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Acting on price sensitivity in BigLaw firms

In Acting on price sensitivity in BigLaw firms, Richard Burcher writes: One of the many shortcomings in our current approach to pricing legal services is the preoccupation with merely pricing the job. While at face value this would appear to be all that is required, it is in fact only half of the calculation. The other half of the equation is pricing the client.

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Here be dragons writes Richard Burcher about fixed fees

Let us say at the outset that we are strong proponents of fixed fees, even in areas of work where they have not been particularly prevalent such as dispute resolution. We believe that they should be used much more than they are to the benefit of both firms and clients. Here’s why…

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Reputation trumps price say most GCs

Earlier this year Validatum published a blog entitled ‘We’re more expensive than them because we are better than them’.

The blog began with my observation that although there are clearly exceptions, it is well understood by most law firm marketing and BD specialists, if not so much by partners, that for the most part, technical ability is not a differentiator in the eyes of clients. And even if it is a differentiator in a specific situation, claims of superiority tend to be viewed by clients as little more than hyperbole and lacking any kind of proof.

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“We’ll have a chat at the end” – a $20B black hole

We lawyers detest talking about our fees with our clients, yet analysis suggests this is leaving a $20B black hole in the revenue of BigLaw firms.

Richard Burcher’s firm, Validatum, has worked with over 300 law firms in 18 countries and if there is one common denominator he observes, it is a shared perspective that the price conversation is the most unpalatable and stressful aspect of the lawyer/client relationship.

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