OnDemand WTP Pricing Research

2014 Altman Weil Survey: Pricing Jumps to Top | Patrick on Pricing

Altman Weil recently released the results of its sixth annual Law Firms in Transition survey. Pricing is, once again, front-and-center. Whereas law firm pricing played a prominent role in last year’s survey, this year pricing is the major theme of the 2014 report:

Large majorities of law firm leaders responding to the survey agree that greater price competition, practice efficiency, commoditization of legal work, competition from nontraditional service providers, and non-hourly billing are all permanent changes in the legal landscape. For the most part, these are changes that have been imposed upon them from without – from more demanding clients and more competitive newcomers who are challenging the rules of legal service delivery.

The survey’s overview highlighted several specific law firm pricing trends:

  • 73% of firms are developing data on the cost of services sold
  • 49% of firms are training their lawyers to talk with clients about pricing
  • 45% of firms are identifying their clients’ unique pricing preferences
  • 30% of firms are changing their strategic approach to pricing
  • Overall billing rates increased by 4%; average hourly rate discounts fell between 21-30%

The survey challenged firms to marry pricing and strategy in order to have long-term success:

The large and critically important topic of pricing must be part of every firm’s strategy. The overarching goal is to align pricing methods, communications and metrics with clients’ value proposition. Without doing so, too many firms will fall into the ‘discounting trap’ which can destroy margin and profitability over the long-term. It’s tricky because clients are not all alike in what they want. Law firms have to assess pricing/value propositions for each client, their appetite for alternatives to hourly billing and their need for predictability, then customize their responses accordingly.

Read complete blog here:

2014 Altman Weil Survey: Pricing Jumps to Top.

Post a Comment

WP-SpamFree by Pole Position Marketing