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The AALL Spectrum® Blog is published by the American Association of Law Libraries. Submissions from AALL members and other members of the legal community are highly encouraged. Opinions and editorial views expressed are those of the authors and do not represent the official position of AALL. AALL does not assume any responsibility for statements advanced by contributors. The previous Spectrum Blog was located at aallspectrum.wordpress.com.
7/21/2014 1:29:25 PM

Top Ten Take-Aways from “Librarians and Law Firm Pricing: Learn the Stakes, Get Involved”

Top Ten Take-Aways from “Librarians and Law Firm Pricing: Learn the Stakes, Get Involved”
written by Wendy Maines, JD, MSLS

I sat front and center for this law firm pricing session. As a Librarian Relations Manager for Thomson Reuters, I am well acquainted with client concerns about pricing. I was also eager to learn from a well known legal ‘blawger’ about how pricing of legal services affects the firm, and where law librarians come into play in the pricing arena.

Toby Brown, Chief Practice Officer at Akin Gump Strauss Hauer & Feld and contributor to 3 Geeks and a Law blog, began the session with definitions of various pricing methods and margin measurements. My heart dropped. While my hand was whisking across the legal pad to furiously keep up with his clear expertise on the topic, I kept thinking “There is a reason I did not become a CPA.”

But then the clouds cleared. Brown was setting the stage for a general understanding that:

     1.  Revenue does not equal profit.

At the heart of the basic profitability equation (Revenue -  Cost = Profit), profits and revenues are on different sides of the equal sign. So one might think that increasing revenue would automatically and positively impact profits.  One would be mistaken. Firms need to examine instead, for X revenue generated, what was the cost of the hours it took to generate that revenue? Firm management tends to look at fixed costs when trying to cut back on expenses. But cost per hour worked is an important and often forgotten part of the profitability concept. To wit…

     2.  Not all revenue is good.

Discounting hourly rates severs profit margins at double or triple the rates of the discount. For example, discounting the hourly rate by 5% has a negative 10-15% impact on profit margins because the matter costs don’t change! Once the discount is applied, client expectations have been established. Discounts set bad expectations for future work, and the likelihood of ‘undiscounting’ rates in the future is almost nil. Instead,

     3.  When it comes to fees, find out the client’s pain.

Hmmmm. This sounds suspiciously like a reference interview. Attorneys need to ask probing questions to unearth the true motivator behind a request for legal services and their payment process? I know of a group of professionals who excel in the art of digging into what is truly being sought after. Maybe an opportunity for librarians to contribute is to share reference interview skill sets with their patrons to apply in client meetings. What are the client’s real concerns about fees and otherwise? Once the firm knows this, appropriate pricing methods can be applied for a win - win situation.


     4.  The ultimate pricing question to ask the client is “One year from now, what will fee success look like to you?”

From the mouth of Toby Brown, this is the magic question. We could subtract the word fee, and have a pretty great question we should all be asking of our patrons and ourselves. What defines success will differ for everyone. Let’s begin our efforts with the desired outcome in mind and work backwards to determine the necessary steps to achieve that outcome. No useless spinning of wheels. Just practical, do-able genius strategy equally applicable to both professional and personal goals. You’ve gotta love that in a take-away!


     5.  Value is squishy.

This is another direct Toby Brown quote. I began to forget the fury of my original note-taking angst and bask in the truth of recent matters asserted. Value IS squishy. So, to make ourselves matter more, to impart real value as a librarian, we need to know what our patrons and their clients see as valuable. Then provide it. It is simple, but not always easy. Referencing point three above, librarians can perform the not easy task of ferreting out this information. Just remember, value can and will change over time and from patron to patron. Look at it as job security. We will always have the squish factor to contend with, and thus will always have the opportunity to involve ourselves in areas that are of most concern to management.

     6.  Legal Project Management is at its essence:  Plan, Budget, Monitor.

LPM is a popular buzz word in the industry. Librarians understand project management concepts. Plan, budget and monitor are what we do. Fortunately for me, no CPA is required to implement them! Just some proactivity, common financial sense and staying on top of the details. Budget building in project management starts from the top down and only goes as far down into specifics as is required. Less is more. The key to success in LPM is to continuously monitor the budget against performance and course correct as needed.

     7.  Just because a client will not pay for online legal research services, does NOT mean they will not pay for a librarian’s time.

Another Toby Brown quote is “Librarians have high margin.”  Preach! And the translation:  we add to the profit part of the equation by our deep subject expertise and our overall affordability. Clients may be very willing to pay for the librarians’ contributed hours based on the net gain they’ll experience in outcome.

This was a highly helpful and practically informative session, and I left with several take-aways. Not least of which are these remaining which afford a more broad application:

     8.    Don’t judge an experience by the first five minutes.

I may have been in a full body sweat of nervous incomprehension while listening to the initial breakdowns of financial terms, but I gained an immense amount of learning in following fifty-five minutes. Well worth the released sweat toxins!


     9. Be willing to sit with discomfort in order to break beyond your perceived boundaries.

There was a method to Toby’s initial margin madness. Attendees needed to know up front that the pricing space holds a lot of Guesswork and Theory. These wild chaps, Guesswork and Theory? They can be tamed with meaningful information. Not volumes of data mind you, but strategic supporting documentation that librarians are well equipped to vet, analyze and deliver. This three step process is what translates data into actionable Knowledge. Firm finance and pricing heads then have more Confidence as they move forward with fee structures. Knowledge and Confidence are nicer chaps that bring an inherent value to the table. That’s worth a bit of discomfort, no?

 
     10. *Every* position within the law firm can benefit from library services.

Points three through five speak to the notion of asking questions to uncover patron and client pain points. Then you’ll have the driving force upon which to focus library contributions. Expand this question asking practice across the entire firm. Flesh out opportunities to impart your knowledge and ease the burdens of firm management. Be proactive with their needs by becoming an expert on what information systems are available and how they can be applied. Librarians are nothing if not creative and resourceful. Seek out new library patrons within the firm using this method, regardless of the individual’s title. Be boundless in defining your patrons.

Technically, this article is supposed be a review of the Pricing session; not a Top Ten Take-Away list. So my concise review is this:  two thumbs up! For my hour investment, I was given at least ten solid tips for practical application as a law librarian. That’s a ROI of one tangible tip per six minute billing increment. I may not have the letters CPA after my name, but even I recognize that as time investment well spent.

 

Wendy Maines
Librarian Relations Manager, Thomson Reuters
wendy.maines@thomsonreuters.com

 

 

 

 

 

Posted By Wendy Maines at 7/21/2014 1:29:25 PM  2 Comments
7/18/2014 8:59:30 AM

May/June 2014 Issue of HALL Newsletter Available

The May/June issue of the HALL Newsletter is available now.  In this issue you’ll read about Margaret Bartlett’s experience at this year’s AALL Leadership Academy, catch up on the latest member and chapter news, and get to know a fellow member a little better in the “Member Spotlight.” 

Posted By Kristen Moore at 7/18/2014 8:59:30 AM  0 Comments
7/17/2014 3:16:29 PM

Spring 2014 CALL Bulletin Available

The Spring 2014 issue of the CALL Bulletin is available.  Check it out to meet new members and catch up on all the latest news and happenings of the Chicago Association of Law Libraries.  You’ll also find helpful articles on topics such as what to do when your favorite web service disappears and what topics are hot in library school. 

Posted By Kristen Moore at 7/17/2014 3:16:29 PM  0 Comments