Global Unification of the Legal Profession

Table of Contents

1. ???Featured Article - Pricing Legal Services- Ben Weinberger

Ben Weinberger a lawyer, technologist, and operations and business unit leader with experience across multiple sectors. I currently serve as the Managing Counsel - Major Contracts and Head of Procurement and Property at the Consumers' Association and Which? Ltd, the UK's consumer champion, and as Chief Innovation Officer at Juris Operandi, a legal consultancy firm that helps law firms and in-house teams leverage technology and process improvement to enhance their service delivery and profitability. Ben has consulted on projects for multinational organizations including The Walt Disney Company and Chevron and previously practiced law in Chicago where, after clerking for the Federal District Court, he served as legal counsel for the Illinois Department of Professional Regulation. He is a regular speaker on such topics as Data Privacy and Security, Information Governance and Emerging Technologies, and Transformational Trends in Professional Services. He holds a BA in Economics from the University of Michigan and a JD from the University of Wisconsin.

2. Global Legal Market Consolidation - How? A Billion Dollar Opportunity - Stephen McGarry

3. Introduction - The Global Business of Law - What's next?

4. Global Legal Leaders. com Features

5. Leaders in Legal Business - 2022

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???1. Featured Article: Pricing Legal Services

In the “good old days” of law practice, pricing was a simple concept. It was a sellers’ market, and law firms could name their price. Estimates were used for guidance at best. In fact, a colleague of mine, a former law firm managing partner, regales audiences with tales of how when he first entered practice, his mentor taught him a simple method for pricing work. It was less than exact: At the end of the matter, hold the file of paperwork in one hand and set your price based on the general weight of it (“That feels like it’s about $45,000’ worth of work”). Somehow, that used to be acceptable. Even for those firms that didn’t subscribe to the “weight = cost” formula, a simple ballpark figure quoted along with a minimum retainer accompanied by an hourly rate was commonplace. Firms even passed on a bevy of expenses on top of that formula, charging for faxes, photocopies, long-distance, and other creative concerns. In 2008, that all changed and has continued to evolve.

Firms today need to embrace the best practice of evaluating pricing before a matter is opened, as it allows the firm to have the appropriate enterprise controls. There are two elements to proper pricing of a matter: (1) determining scope (or budgeting) and (2) what pricing or fee type should be used with the matter. Firms are becoming better at the latter but are quite unskilled in the former. Both must be razor sharp and working in concert to form the bedrock of profitability in the new market for legal services.

Legal services has become a buyer’s market, which is why we must reshape profitability. Corporate clients expect the same quality of work but now delivered within price guidelines they set at the outset of a matter. When dealing with outside law firms, there’s no more “guesstimation” in legal billings, and there’s little room to negotiate. A firm’s value is found in the delivery of quality matters at the price and level of expertise they expect. The insertion of price and client-set budgets has upended the law firm business model.

The challenge for firms adjusting to this tectonic shift is that historically, there was little to no understanding of the true cost of delivery for their services, complicating the transition to delivering work — profitably — to budget. Firms must reengineer themselves, and quickly. Clients are aggressively interested in managing rates, are refusing to pay for firms’ inefficiencies, and simply need predictability so they can manage their own intensely scrutinized budgets. It doesn’t get much more essential, economically speaking, than understanding cost and creating the right processes around that cost to ensure the profitability of your business — and that’s what firms must do.?

Rates are a Profit Driver

Although this is obvious, the point still needs to be made: Billing rates remain the core pricing structure used in the legal industry, and the level of a firm’s rates is key in determining its level of profitability. As a rule of thumb, a one-point increase in rates leads to a two-point increase in profit. The reverse applies as well. In our experience, firms typically have a range of 1 – 3 percent increase in profit for each point of rate change. The range exists because it depends on the specific timekeepers involved, and the relationship between the billing rates and the timekeepers’ cost rates.

Discounts happen when clients tell us our prices are too high for particular pieces of work. Specifically, write-downs are reductions from a bill before it goes to the client, and write-offs are reductions requested by the client after they have seen the bill. Write-downs signal that the firm or a partner has decided that a particular effort had no value. Examples of write-downs include:

???????? The work is out of scope, and the partner knows the client will not pay for it.

???????? The associate was inefficient in their work.

???????? The associate did not understand the assignment and did the wrong thing.

?Write-downs become important as firms look for ways to lower the cost of delivering a service. By identifying recurring types of write-downs and eliminating the effort before the work is performed, a firm can lower the cost of the service.

Write-offs signal that the client did not see value in a particular effort. This may occur because the firm did not communicate the value of the effort properly, or it may just be that the work should not have been done. Note that, in some cases, write-offs are just good old-fashioned flaky clients who don’t pay their bills (a cost of doing business).

Citi Private Bank Law Firm Group recently reported revenue growth has fallen to 3.6 percent throughout 2017, down from 3.7 percent in 2016. Oddly, this is almost entirely in response to increased billing rates — an increase of 4 percent, to be exact. While the difference is marginal, when you consider that the 4 percent increase is much greater than normal, that demand has dropped by 0.2 percent, and that collection cycles are lengthening — it illustrates that raising rates is not a good long-term strategy.

??????????? Firms need to adjust their pricing and pricing strategies in response to the market. The challenge is for firms to understand and adequately address the many moving parts of pricing in today’s market and reflect the actual cost of their matter delivery. This requires technology to harness data.

Beyond the Billable Hour

So, how do firms now need to price? First, there are two classifications of fee types: hourly and non-hourly. The hourly fee types are those that are still based on per-hour rates. Non-hourly fees have no billable rate and are set using many different criteria. The table below lists the most typical fee types.

Continued

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Stephen McGarry (Amazon profile), BA, MA, JD, LLM (Tax), is the founder of GlobalLegalLeaders.com. He also founded Lex Mundi, WSG, AILFN & HG.org, one of the first 10 legal websites in 1995.

2. Global Legal Market Consolidation - How? A Billion Dollar Opportunity

Over the last several decades there has been an expansion of firms, growth of networks, development of ALSPs, and the consulting professions. The expansion only increased the extraordinary market fragmentation in the legal profession. No firm or law business has a market share greater than .3%.

Problems

1. Market fragmentation in the legal markets creates inefficiencies.
2. Hundreds of thousands of law firms and related businesses offer similar services. ?Firms and businesses are duplicating new innovations.
3. Clients,?Market fragmentation in the legal markets creates inefficiencies.
4. Even with pronounced segmentation, clients cannot locate the exact services they require.

Results

1. Market inefficiencies increase costs to clients.
2. Innovative products/services are unable to reach the global market, increasing costs.
3. Service and product differentiation are almost impossible.
4. Unparalleled financial opportunities are lost to innovators and investors.

How??Consolidate the Global Market and Integrate the 4 practice functions?(law firms, networks, ALSPs, and consultants)?and the media.

This Consolidation makes 20% of the global B2B legal and accounting market easily accessible in minutes. This is $300 billion law related services.

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3. The Global Business of Law

In 2024 what approach can the legal profession take to unify the highly fragmented $1.1 trillion global legal market to increase efficiency to benefit everyone?

Three years ago this was the pivotal question that became the? catalyst for this venture. It culminated in the creation of the Global Legal Leaders (GLL) website as the solution. With the understanding that the legal sector encompasses more than just law firms, but also networks, consultants, Alternative Legal Service Providers (ALSPs), and legal media, GLL set out on a mission to comprehensively bring together the recognized leaders in the global legal ecosystem.

The initial steps were targeted to identify the leading 230 law firms and their management across the 50 largest global markets. The scope broadened to encompass 50 legal and accounting networks, organizations that have invested billions in forging relationships to benefit clients. More than 20 ALSPs and 200 consultants were integrated into GLL, recognizing their crucial role. To round off the foundational framework, legal media, the essential channel for keeping the profession interconnected and well-informed were included.

Presently, the GLL platform facilitates direct access to a vast network comprising over 10,000 firms, with 600,000 professionals across 12,000 offices in 160 countries. Together, these entities offer $300 billion in annual services. GLL is accessible at no charge to the 500 organizations to advertise their expertise and interests. Individual users are invited to create a free account to tap into this expertise Each listed entity and user manage their own profiles. GLL is in 109 languages.

Newsletter's Objectives

The objective of the newsletter of the newsletter is to become the central nexus for the global legal community, offering a dependable venue for networking, sharing, and gaining insights into the international legal field. GLL, is dedicated to breaking down barriers and fostering connections between professionals and their clients. Its role is to spotlight the most influential leaders and innovators in the profession, who are at the forefront of driving the legal profession forward.

Each issue of the newsletter delivers articles and insights from leading thinkers in the profession, focusing on the business practicalities of legal practice and addressing the unique challenges you encounter. Its goal is to keep you informed of the newest trends and revolutionary practices in the legal sector.

Furthermore, your interaction with us and your colleagues via comments on LinkedIn is encouraged. This invitation extends beyond mere dialogue; it is an opportunity to connect with a community that shares your professional interests and challenges. Your active participation is crucial, enriching our vibrant business and professional community with diverse ideas and perspectives.

Thank you.

Global Legal Leaders

4. Global Legal Leaders.com - Features

• The Global Legal Leaders Blog - Hundreds of articles on the business of law written by recognized leaders in the legal profession.
• Claim Your Profile: If your firm or you are already included on the website, claim you profiles for a changes and to receive business referrals.
• User Profile: As a user create your own profile to us the RFP system.

• 109 Languages: The website can be translated into 109 languages.
• Artificial Intelligence: You can access the entire world through ChatGPT 4.0 already included on the website, claim you profiles for changes and to receive business referrals.

5. Leaders in Legal Business - 2022

Law is a profession and a business.

At its core, the argument (against advertising) presumes that attorneys must conceal from themselves and from their clients the real-life fact that lawyers earn their livelihood at the bar. We suspect that few attorneys engage in such self-deception ... Bankers and engineers advertise, and yet these professions are not regarded as undignified.

• Bates v. Arizona, 433 U.S. 350, 369 (1977).

Forty (42) leaders write about their and their organization’s contribution to both. (253 Pages

?? Tap to read: Leaders in Legal Business

Mission

The mission of Global Legal Leaders is to provide real-time access to the expertise of lawyers, accountants, consultants and ALSPs in 10,000 firms in 160 countries - for free.

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