Project L'Oréal - providing support to accurately, confidently and quickly prepare quotes and estimates for your client
“That sounds great Rebecca. I look forward to receiving your quote to do the work”.
As the client puts down the phone following a detailed discussion about the scope of the work, you are at once excited by the prospect of a new instruction but also worried as to how you can accurately price what on the face of it appears to be a complex matter.
In the past you may well have discussed some ideas internally, spent a short period considering the scope of work necessary to achieve the client’s objectives and probably made an informed guess as to what the price might be. This would then have been forwarded to the client, probably in a relatively brief email, followed up with an engagement letter if the client accepted the price that was quoted.
And with fingers crossed you would have started the work but with nagging fears about whether you had actually got the pricing right.
We now have some additional tools to help us with this. Following on from the Pricing Masterclasses which have now completed, Knights plc has subscribed to a new piece of pricing software called Virtual Pricing Director (VPD) which will provide support for all our colleagues to help them accurately, confidently and quickly prepare quotes and estimates for clients.
The software has been designed with the fee earner in mind. It introduces historic data into the process of pricing jobs (“how much did we charge the last time we did something similar?”), artificial intelligence to help calculate fixed fees (no more, “It feels like about…”) and document writing technology to automatically produce a document in the Knights style based on the options you have selected (“I don’t have the time to prepare a proper scope and pricing proposal”).
The software is preloaded with detailed scopes of work for roughly 80 of our most common work types but there is flexibility to adapt these for the purposes of individual teams or to create new scopes from scratch.
VPD also calculates the gross profit margin for the matter so we can now estimate the level of profit which each matter could produce if scoped, priced and managed appropriately - valuable information in any fee related discussions with clients.
The software is already being used in various parts of the business and it is available to anyone who is regularly involved in the pricing of our work, whatever their level of experience. If you think you would benefit from using VPD please speak with your team leader.
During November and December 2019, Partners and other senior fee earners were invited to attend Pricing Masterclasses delivered by an external consultant, Richard Burcher from Validatum.
Validatum is one of the leading pricing consultants working with the legal industry and Richard provided a thought provoking but practical introduction to some of the pricing strategies which are being used across the marketplace and which Knights could adopt.
At the heart of Project L’Oréal is giving our lawyers confidence about the value which they create for our clients. Whether we are helping our client seize a commercial opportunity or prevent a potential loss, the involvement of Knights lawyers can generate or preserve many thousands, if not millions, of pounds.
Recognising our value, and pricing appropriately, was the core message of Richard’s presentation. He also introduced techniques to get the client “onside” early on, ranging from co-creation of the scope of work through to presenting a choice of pricing structures such that the client feels they have control of their own legal spend.
All of this is designed to create positive discussions about scope and price from the outset so that the client and Knights share an understanding of what success looks like on the matter and also a shared expectation as to what this will cost in legal fees. From this starting position ongoing communication about the progress of the matter and potential changes in scope, leading in turn to potential changes in price, are likely to be easier and achieve better outcomes.
Over the coming weeks and months there will be more updates on Project L’Oréal and an introduction to Virtual Pricing Director, the new pricing software we are using to improve the accuracy of our prices and the speed with which we can prepare quotes and proposal documentation.
No one enjoys having to call a client to say that our bill to them is going to be significantly higher than they are expecting.
Project L’Oréal is being rolled out across the business and is intended to help us avoid this kind of client conversation. It will give our professionals confidence in their discussions with clients about the scope of an engagement and, linked to this, what we will charge for the expertise and experience which we will deploy on their behalf. The result of this should be increased revenues and profits for the business.
At the heart of it is a new piece of software called Virtual Pricing Director (“VPD”) which we are introducing to senior fee earners during November, December and January. In time VPD will be available to all fee earners, allowing teams to collaborate as they develop pricing proposals.
VPD is preloaded with scopes of work for our most common work types. It guides fee earners through the issues they need to consider before discussing a price for an engagement with a client. VPD will save time too and will allow junior members of the team to play a part in the pricing of engagements.
More important than the software however, L’Oréal is about our professionals fully understanding the value to clients of the work we perform and the strategic, commercial, financial and personal benefits we create for them. This is worth paying for and we need to ensure that this worth is reflected in the prices we charge.
None of this is new. We price with varying degrees of success every day. But we expect that a more scientific approach will lead to more constructive interactions with clients about pricing and help us avoid those gut-wrenching conversations. At the same time it means we will be properly paid for the value we deliver.
We’ll keep you updated on Project L’Oréal as it progresses. If you have any queries in the meantime, please speak with James Philpott.