• Legalweek (formerly Legaltech) is just a few days away, so here’sA Beginner’s Guide To The Biggest Week In Legal Technology.

 

  • Data & Analytics: Transforming Law Firms” has just been published by ALM Intelligence and LexisNexis. Here’s an executive summary and link to the report.

 

  • Here’s a fresh essay about law firm innovation from  of Thomson Reuters Legal Managed ServicesGreasing The Gears Of Legal Commerce — Automatic, Systematic, Hydromatic (alt.legal) Innovation. “CLOs indicated that nearly 25 percent of outside counsel fees are “price-insensitive.”

 

  • The Big 4 continue their relentless march into legal. I skip most of these posts, but this one specifically mentions AI: KPMG expands Asia Pacific legal services. “It will also offer technology enabled legal services, using robotics, artificial intelligence and other technologies developed globally and in China through the KPMG digital ignition centre.”

 

  • This is an interesting post by Charles P. Edwards of Barnes & Thornburg: The Noisy Business of the Law and Insurance Claims. “…(T)he idea we humans are needed for most decisions is an ‘illusion.'”

 

  • Here’s a good example of a law firm (Amsterdam’s De Brauw) using tech as a differentiating marketing strategyHop on board and experience the value of legal tech and project management.

 

  • Bob Ambrogi posted this 47-minute podcast: LawNext Episode 25: Using AI to Enhance Virtual Receptionists, with Smith.ai.

 

  • From Arup Das of Alphaserve Technologies, here’s an interesting discussion of the age-old build vs. buy conundrum: How to Approach Legal Innovation: Options for Every Firm.

 

  • This is a thought-provoking post: Can Deepfakes Pose a Cybersecurity Threat to Legal? ““Deepfakes are real and emerging as an issue but they, like certain types of technology, could emerge very quickly; we talk about this today and it could be a very big deal in six months or it could be nothing,” Reed Smith’s Stegmaier cautioned. “We simply don’t know.””

 

  • This hour-long podcast is from the Lawyerist: “In this episode with Natalie Worsfold, we talk about her law firm’s approach to law practice, and why more firms aren’t following suit. We start by asking Natalie what problem Counter Tax was trying to solve, then explore how they solved it, what their solution does now, and the plans they have to evolve and grow their solution.”

 

  • This is an idea I have been kicking around for a while. Nick Hilborne gives it the thought I believe it’s due: “Reproduction of the legal profession” at risk from automation. “If junior associates are ‘gradually culled’ from law firms as a result of automation, the entire reproduction of the legal profession could be jeopardised….'” And here’s a US write up of the same issue: Junior Lawyers Are Going Extinct And Nobody Knows What To Do About It.

 

  • AI Goes to Court: A Conversation With Lex Machina and Dorsey & Whitney. Post here.

 

From Artificial Lawyer:

  • The Benefits of the LexisNexis LegalTech Accelerator. Post here.
  • EY and Artificial Lawyer Hold Legal Ops + Technology Event.  Post here.
  • Slaughter and May Names 3rd Fast Forward Cohort, Inc. Blockchain Co. Post here.
  • Meet ATJ Bot – The World’s First Legal Aid Voice Assistant. Post here.
  • How to Build Your Business Case For Contract Management – The Juro Guide. Post here.
  • Oz + NZ Professional Services Startup of the Year Award Launched. Post here.
  • Legal AI Co. CourtQuant Predicts Hard Brexit Impact on British Law. Post here.
  • Christian Lang + Former TR Boss, Tom Glocer, Join Reynen Court. Post here.
  • GCs Keen To Embrace Tech Tools + Legal Ops Skills – Survey. Post here. (Note: This story is based on a survey where n=80. Assuming no other methodological problems [big assumption!], this means that in all of the findings each number is well within the margin of sampling error of the statistics above and below it on the graphs.)
  • Meet Fincap Law: A New Tech-Driven Firm For the New Legal Era. Post here.

 

Posts by Law Firms:

 

 

 

 

 

  • Eric A. Klein and Aytan Dahukey of Sheppard Mullin posted: Day 2 Notes From The 2019 JPMorgan Healthcare Conference. “We are seeing a lot of healthcare entities starting to focus on precision medicine – artificial intelligence suggesting which oncology drug works best for your specific genetic condition and cancer – but that essentially is a transactional function. And the market really wants a partnering function ” Post here.

 

 

 

  • From Reed SmithDraft ethics guidelines for trustworthy artificial intelligence published by the European Commission. Post here.

 

 

  • Akin Gump postedPolicymakers Focused on Artificial Intelligence, Write Akin Gump Lawyers in The Journal of Robotics, Artificial Intelligence & Law.

 

  • Hogan Lovells postedLitigating intellectual property issues: The impact of AI and machine learning.

 

Press Releases and sponsored posts:

  • Here’s a thorough explanation of Gavelytics: Want Better Litigation Outcomes? Know Your Judges. “…(W)ith Gavelytics, you finally get the quantifiable and reliable judge information you need to customize your litigation strategy and increase your chances of winning.”

 

 

  • Gibson Dunn launches AI and automated systems group. Post here.

 

  • The world’s first virtual lawyer, built for Amazon’s Alexa, tests whether lawyers will be replaced by robots. “Australian legal-technology company Smarter Drafter have announced a prototype virtual lawyer, built on Amazon’s Alexa, that creates legal.” documents instantly, just like a real human lawyer. Here’s the Smart Drafter release. Hype much?? And then there’s this: “No date has been set for the release of the first working Alexa integration.”

 

  • HaystackID Acquires eDiscovery Managed Services Provider eTERA, Release here.

 

  • Legal IT Newswire New Product News… Alphaserve Technologies launch Execution as a Service. Post here.

 

  • I’m including this because I used to work there! Am Law 200 Firm Lewis Roca Rothgerber Christie Selects Litera Desktop, Litera Microsystems Full Document Drafting Suite.

 

Blockchain

 

 

 

 

  • From the Baker & Hostetler Energy BlogNew Blockchain Products, an FBI Raid, the $11 Billion Bitcoin Case, Hackers Strike With a 51 Percent Attack and Crypto Tax Analysis. Post here.

 

 

  • Here’s a deep dive into the legal services offered by Oath ProtocolThe Lay of the Land in Blockchain Dispute Resolution and Governance Designs.
  • I’m a big fan of all things “Access to Justice” (A2J), so I was pleased to see this app from DoNotPay and equally happy to see today’s update: “new updates to DoNotPay, … will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer.” There are several other very cool new functions as well, as described in this story in The ABA Journal.

 

  • From Artificial Lawyer: “UK law firm Mishcon de Reya has announced that it is sharing the legal AI models related to real estate it has developed through Kira Systems with the AI company’s wider customer base.” “‘By collaborating with Kira to enhance their UK real estate offering we have already gained valuable insight into how artificial intelligence works and how we can best leverage AI to better support real estate clients, delivering our services innovatively and more efficiently and we look forward to continuing to working closely with them,’ he (Nick Kirby) added.”

 

  • Also from Artificial Lawyer, this interview with Charley Moore of Rocket Lawyer in which Charley discusses embracing smart contracts and the use of the Ethereum blockchain as the platform for his new ‘Rocket Wallet‘.

 

  • This post from Bob Ambrogi makes a convincing case that Cloud Practice Management Software Grows Up. “For the legal professionals who consume these products, this maturing and stabilization of the market can only be good news. No longer need they fear that the cloud is an iffy proposition. No longer need they worry about the viability of cloud providers or the security of their platforms. Cloud practice management is a mature and stable market offering a rich array of products and the promise of continuing development and innovation.”

 

  • Here’s yet another discussion of the incompatibility of the GDPR and blockchain: Why Blockchain And The GDPR Collide Over Your Personal Data, this time from Tom Kulik of Scheef & Stone.

 

  • I enjoyed this breezy summary of last week’s Clio Cloud Conference by Dan Lear, focusing on small firms.

 

  • I’ve got to see a demo of this new pricing offering from Neota Logic and Validatum: Platform brings AI to pricing legal work. “Virtual Pricing Director will give users a complete pricing summary, outlining not only the fees options but also an explanation of how they are calculated, making it easy for the client to select the right option for them. One more click and it will be automatically emailed to the client, and put on your client file.” Wow.

 

  • Here Osler touts its CRM platform that provides “Relationship Intelligence” by “leverage(ing) artificial intelligence (A.I.), machine learning, and data automation to improve team productivity, data accuracy, and completeness of information in CRM.”

 

  • This from Australia’s Stacks: Algorithms, artificial intelligence, automated systems and the law. Several AI problems are discussed relating to society, business, government, and the human race generally.

 

  • And finally for today, Brownstein published Rise of the Machines: Artificial Intelligence and its Growing Impact on U.S. Policy, a summary of the “House Oversight and Government Reform Subcommittee on Information Technology … white paper on the intersection of public policy and artificial intelligence (AI).”

This is the second installment of my three-part Pricing series. The first is here.

This installment covers the three essential elements of pricing legal services.

Tomorrow, in the final installment, I will show how to use Competitive Intelligence and Business Intelligence to develop the optimal price.


Pricing

The MIT Sloan Management Review7 identifies three factors to be considered in pricing (all apply to legal services):

  1. Cost-Based Pricing:relies on an analysis of the business’ operating costs to determine how to set the price to break even or achieve a certain return.
  2. Competition-Based Pricing: looks at data on competitors to determine appropriate pricing levels.
  3. Customer Value-Based Pricing: focuses on the customer’s perceived value to determine price.

Let’s consider each in some detail.

Cost-based pricing

This is directly relevant to the profit discussion in Part One of this series. Cost-based pricing means calculating the total cost of the work, including all allocated direct and indirect expenses. If ALL firm expenses are allocated to matters, any work priced above its cost will be profitable. Firms should be very reluctant to approve any new work projected to be unprofitable. Some firms have pricing committees established for the purpose of acting as gatekeepers in this regard.

Remember, the total amount of any discount fully hits your bottom line profit. Many partners are quick to give in to clients’ requests for discounts, but these should be given only as a last resort after exhausting other methods of increasing the value of your services to this client. (See “Customer Value-Based Pricing” below.)

This may be hard to believe, but I have seen it happen several times. Some in-house counsel receive bonuses based, in part, on the discounts they manage to negotiate from outside counsel. (This seems to have been more common a few years ago than today.) So, law firms would increase the entries on their rate sheet a bit only so they could then give the client the desired discount. Continue Reading Better Decisions with Business Intelligence and Competitive Intelligence — Part Two: Pricing

Introduction

“(Pricing) can just destroy you if you don’t do it right. It doesn’t matter whether you’re putting out a novel you’ve written or providing a service through a pest control company or you’re a veterinarian. The bottom line is that pricing is extraordinarily important.”1

Charles Toftoy

Background

Until the past decade, most law firms simply billed clients according to their current rate sheet (with occasional discounts) and gave pricing scant thought. In today’s market, that won’t do. Pricing is much more important than in those good old days, not just in terms of the amount charged, but in terms of the billing structure (e.g., caps, collars, fixed fees, contingencies, hold-backs, success bonuses.)

With law firm margins thinner than before, it’s necessary to understand the profitability of each matter and client. Effective pricing means structuring fees so the firm wins the work and that the work is profitable. This is also a marketing opportunity in that optimal pricing helps clients meet their strategic goals (e.g., predictability, and “win at all costs” when needed); and it’s an opportunity to strengthen client relationships by increasing transparency.

Business Intelligence and Competitive Intelligence can substantially help manage the risk inherent in those pricing decisions. Optimal pricing requires three types of intelligence:

  1. Profitability of the matter and of the client under various fee models.
  2. Understanding of the fees being charged by competitors for similar services.
  3. Buyer price sensitivity.

At its core, the pricing of legal services is like pricing anything else, a matter of supply and demand, elasticity, competitive forces and buyer values.

 

Pricing Fundamentals

Definitions

Continue Reading Better Decisions with Business Intelligence and Competitive Intelligence — Part Two: Pricing