Many of our clients are faced with the challenge of sustaining profitability while meeting client demands for greater value. To help these firms to maximize profitability, we conduct several client profitablity analyses each year.
Market-aware law firms realize that clients can globally analyze billing data and draw statistical conclusions about the appropriateness of lawyer billing. For example, it would not be hard to determine the number of hours charged to a client's matters and perform competitive comparisons and reasonableness tests. Imagine the potential consequences of a poor showing in the testing process.
Does it ever make sense to cut price?
Benchmarks, surveys, and market comparisons are useful for indicating how well a firm is doing against a standard set of external norms. To complete a thorough competitive analysis, we recommend that law firms supplement these external data with a strategic profit analysis.
Law firms are increasingly faced with the challenge of sustaining profitability while meeting client demands for greater value. These challenging times require firms to adopt new and better ways to measure productivity and profitability. In our last post, we focused on calculating profitability per hour by timekeeper and by section. This post will extend that analysis to an individual client/ matter level.
Predictions can go in many directions.