Market data or comedy moustache?
By Richard Burcher, Chairman of legal costs and pricing consultants Burcher Jennings
Like many other non-mechanically minded people, when I take the family car to the garage for a service or repair, I’m never sure what kind of bill I’m to be faced with. Fortunately, the hourly rate in the workshop is clearly stated, for customers and for competitors to see. In the highly unlikely scenario that I was to become the manager of a similar firm, I could set my rates to be competitive. Or I could undercut for price advantage or add a bit more for my more highly qualified technicians and the carpeted air conditioned lounge where my clients might wait…..
Petrol stations display their prices on digital display screens on the edge of the forecourt. It’s easy for the local Esso station to know what their BP rival is charging its customers. Supermarket chains on the other hand spend a fortune collecting comprehensive data about their rivals prices, in order to inform their own pricing strategies – to match, to differentiate, to mark up, to price-promote. What about law firms?
I can hear the holler already. “Legal services aren’t like cans of baked beans or litres of petrol! They are highly personalised professional services, with each client interaction unique and priced individually.”
I agree. Law is different, but increasingly firms are facing a competitive market for their expertise. So how do you decide what to charge your clients? How do you set the hourly charge-out rate for your Partners or other types of fee earners? How do you avoid a reputation among your client audience for being the most expensive or, perhaps worse, price too low and win lots of work on ever-diminishing profit margins?
Most law firms price on instinct not from informed research.
Do you sneak into your local competitors office with a comedy moustache posing as a potential client to discover the hourly rate for a 5 year PQE employment specialist solicitor? At least that would be real market insight.
Imagine that you had an up to date source of information on what other firms are charging, what their rates are for partners, for qualified solicitors, legal executives or other fee earners. Even more useful would be this data if it were split by geographic location and by area of law. That’s the aim of Burcher Jennings new market pricing data survey.
Similar research has been available in New Zealand for the past five years and receives rave reviews from many firms who take part. The intelligence is only made available to law firms and accredited sole practitioners. The reports are never offered for sale to any other party or industry sector. Surveys are completed on-line and only take around 15 minutes to complete.
The first 500 England and Wales firms who agree to provide data (which will be carefully anonymised) will receive the first year’s reports free of charge. Participating firms will be able to set fees based on accurate market intelligence, confidently explain and justify charges and price consistently with their firm’s wider strategies. You still will be able to choose whether you publish your hourly rates and whether to continue wearing the comedy moustache. But you will be confident that your pricing strategy is based on real market data.
Associate News is provided by Legal Futures Associates.
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