Canadian Lawyer

20 J a n u a r y 2 0 1 5 w w w . C a n a D I a n L a w y e r m a g . c o m ays to charge cli- ents beyond the traditional hourly billing approach have become part of the continuing evolu- tion of how law firms manage their opera- tions. Many of these alternatives, however, see the risk shift from the client to the firm — somewhat terra incognita still for many. A growing trend to ensure law firms continue to main- tain a profit in this new environment is to have a pricing officer on board. "If you go back about five years you'd be hard pressed to find a pricing officer in a U.S. law firm," says Jordan Furlong, legal industry analyst and principal with global consultancy Edge International who blogs at Law21.ca. They are quickly becoming the norm south of the border, particularly for larger firms, he notes. "It is not just the use of pricing officers that is new, so is the concept of pricing." For Furlong, a strong advocate for law- yers to focus on pricing, not just billing, having someone designated to the role familiar with a firm's internal mechanisms and workflow and able to combine them with costs, margins, and the bottom line makes sense. Beyond flat-rate packages for legal work such as wills or house clos- ings, lawyers have been reluctant to pro- vide fee quotes to clients. An hourly rate, he argues, is not a price. A pricing officer is someone designated to cost out the project, determining what resources are required and what level of expertise is needed while ensuring profit- ability for the firm. Using this approach the firm can provide the client with an idea of the total cost for which they can budget. "At the end of the day, the price of your prod- uct or service is one of the things that goes into the purchasing decision," says Furlong. "It's from pressure from the clients wanting something more predictable." With organizations searching for ways to do more with less, loosey-goosey bud- gets from corporate legal departments are no longer acceptable to most businesses. Clients are demanding a degree of predict- ability for their legal costs as well as trans- parency. Fixed fees, or at least predictable fees, are what businesses need to base their decisions about legal service providers on. But pricing continues to be difficult for firms to nail down, for a variety of reasons. Not the least of which is that tradition- ally a price, or at least an arrangement, evolved through the relationship between individual lawyers and clients. One of the problems with that approach is most lawyers in the firm will not have a firm grasp on what will lead to a profitable L aw o F F I C E M a n a g E M E n t What is a pricing officer and does your firm need one? By Marg. Bruineman W JeannIe Phan

• Cover