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Firms who invest in technology and creatively price their work will be a success, was the conclusion of a panel discussion with successful and innovative legal firm leaders at the first annual LawTech Atlanta Conference, held Thursday, October 9. The panel included Shannon L. Copeland, COO of Hawkins Parnell Thackston & Young LLP; Bryan Harrison, Partner, Intellectual Property Litigation at Morris, Manning & Martin, LLP; Howard P. Janis, Director of Strategic
Pricing and Analytics at McKenna Long & Aldridge LLP; and Brian Leslie, SVP and General Counsel, EIS & VIS for Verint Systems, Inc. The panel discussion was moderated by the event’s chairman, Chris Cartrett, senior vice president of global sales at Aderant, the world’s largest independent legal software company.
The panelists were in agreement that it is important for firms to invest in technology that enables them to better serve their clients and “get back to basics.” Copeland described how Hawkins Parnell is making technology a priority: “We’re not investing in art—we’re investing in technology,” he said. “The most important thing to us is to have the best lawyers out there… and keeping a set of great lawyers in big cities means strong investment in staff and technology.”
This trend underpins recent findings from Aderant’s 2014 Legal Technology Industry Survey, the results of which were released at the LawTech Atlanta event. The resulting white paper, titled The Emergence of Tigers and Bears and Other Law Firm Trends, is the fourth report in a longitudinal research initiative began in 2009, providing insights into the changing dynamics of the legal industry and how firms around the world are responding to those changes. The survey found that 98% of firms are undertaking one or more technology initiatives in 2014, with 37% of mid-sized and 49% of large law firms reporting increased IT budgets for the year. Feedback from the audience on Thursday was corroborative, and one delegate discussed the rise of technology audit firms, which report on the technology assets in law firms and how they can add value for potential clients.
Another issue discussed heavily in the panel was creativity in billing structures, including the move away from the entrenched hourly billing rate model. While all panelists agreed that profitability is most important, each gave different ideas of how to respond to requests for alternative fee arrangements, from fixed fees and discounted hourly rates, to finding opportunities for the firm and their client to “split the difference” when certain milestones are achieved at greater-than-expected margins. Harrison emphasized that setting prices so that clients know your firm has a stake in the game builds trust and gives them confidence that the firm will be doing their best work.
The Tigers and Bears report also validates the panel’s consensus that demand for these creative pricing structures is growing. Only 2% of large firms reported that none of their clients had requested such arrangements in the past year, and 55% are more likely to invest in systems that support a variety of pricing models.
In regards to changing how partners are remunerated, all panelists agreed that the most important thing is to reward those who are directly adding to the bottom line. Harrison stated that reward structures should be based on the profitability contribution of each attorney. At Hawkins Parnell, attorneys and partners can track firm (and individual) profitability using dashboards from the Aderant Expert ClearView business intelligence suite.
Every panelist agreed that a client-centered approach must underpin every process in the firm in order to be successful and profitable.
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