In North America, the Association of Corporate Counsel is placing a lot of emphasis on value-based pricing, and hence creating pressure on law firms to respond to this. You can see more detail on www.acc.com by the way.
Of course there is some specific focus on approaches to setting and agreeing fees. In Thriving, we often respond to this by fixing or capping our fees. Gradually law firms are also responding to this requirement. The implication is to set a new means of communicating with clients about what drives the value to them and understanding this.
That’s really important. Its rare that – for legal work of significance to the client – that the choice of firm is driven by absolute fee levels alone. We hear clients talking much more about “value for money” rather than cheapest, and thus choosing the firm based explicitly or implicityly on the answer to the “sum”: value divided by price.
It will be interesting to see if the call from in house legal and other buyers of legal services becomes more collective and explicit in the UK and Europe – or if it remains more implicit. Either way, it will increasingly become a source of competitive advantage.
Contact me if you’d like our research about what law firm clients say drives value to them.