Work out what pricing means or expect to go under

first_img‘Most lawyers haven’t got a clue about pricing – no other industry in the world can do “cost-plus”, and now neither can law firms. We’ve got to start training lawyers to estimate pricing.’ I went to an interesting conference about law management yesterday, run by the Society’s Law Management Section. Yes, you heard me, it was interesting. Not all of it, but that quote from Alan Hodgart’s closing speech made me sit up and listen, as he always does. Hodgart is one of the best ‘give it to you straight’ kind of law firm consultants going, in my opinion, because that’s what he does – no nonsense, I’m calling it like I see it. Tony Williams and Stephen Mayson I’ve also found good at doing this, so it’s not just Hodgart. That point about pricing is, I concur, absolutely critical – what on earth do law firms think they are doing if they don’t have an idea of what ‘cost’ to the client they will incur? Hodgart went straight from this into the direct correlation on a firm’s bottomline – costs. If you don’t know what something costs the client, you aren’t likely to know what it’s costing you to produce, and that’s Hodgart’s point: firms he sees are regularly completely out on their gearing and profits, and don’t know how to price jobs beyond thinking of in terms of the billable hour. Billable hour is dead, he said – this isn’t something no one’s heard before, but I’m hearing it all the time now. At the end of Hodgart’s talk there were a few questions – it was five o’clock and there were drinks on a table somewhere – and both of them got to me. One was, essentially: ‘If we’ve got underperforming partners or partners who won’t go out and market, hunt for work, should we fire them?’ To which Hodgart said simply ‘yes’, you should. Next question: ‘I’m a litigator and we are just tied to billable hour, this is way we do things because the government pays things on an hourly rate, and the partners see this as the norm. How do we stop?’ Can you guess how Hodgart took that? Litigation, like any other work, has got to start showing some value for money, he said. Or else. Amen to that.last_img read more

Comparing solicitors online by price will affect quality

first_imgAccountants, who are often ahead of solicitors, now have the ‘benefit’ of a ‘new and revolutionary’ website that compares their charges. It is claimed that by checking prices of accountancy services, the client consumer will be able to pick the cheapest. This, of course, may rely on the number of contributors to the service, who are in danger of getting into a price war.Marketers will say that you should never compete on price alone, as any benefit gained is short-lived. In other words, they mean that the supplier will reach a ‘low’ where supplying their services or goods is just not viable at the base market price. This has happened in the legal profession, particularly with conveyancing. Even if law firms were able to work with price competition, the margins were so tight that when the recession came that the situation only added to the problems. Often, the source of work came from the internet or panel management companies, who in themselves may have sourced some of the work from websites. But always, price was the key factor, followed by service levels. Conveyancing is not the only example – PI is also a strong contender. There is, however, no website for solicitors like the one now promoted for accountants, as far as I know. I think that, while transparency is an important element in the treatment of client service levels, quality will inevitably fall if fair charges are based only on price. My view is: keep away.last_img read more

History lesson

first_img Obiter’s Oxford-educated history tutor used to excuse his ignorance of important past events with the handy get-out clause ‘not my period’. But with more than one history graduate in the office we ought to have spotted that mistake. Apologies. Jeff Skidmore, a partner at Roy Thomas Begley & Co in Swansea, writes in to point out an error in last week’s item by James Morton about Ewen Montagu. The latter was indeed mastermind of ‘The Man Who Never Was’, but the deception plan was carried out in the Mediterranean and its purpose was to deceive the Axis forces that the Allies intended to invade Sardinia and Greece, rather than the real target, Sicily. Fortunately the plan worked and the Axis moved troops to both locations to counter the expected invasions, while the invasion of Sicily (Operation Husky) proceeded in July 1943 with far less resistance than anticipated. last_img read more

Transport Committee re-opens insurance premiums inquiry

first_imgThe transport committee has re-opened its inquiry into cost of motor insurance and has called on former justice minister Jack Straw to give oral evidence. Committee chair Louise Ellman, a Labour/Co-operative MP, said Straw’s recently published report on the rising cost of premiums would make a ‘powerful contribution’ to the debate. Straw’s report was highly critical of insurers taking referral fees from personal injury solicitors, and called for a ban on such payments. It also addressed the increase in the number of personal injury claims resulting from motor accidents and the role of claims management companies. Ellman said: ‘Motorists continue to suffer as premiums increase and there is mounting evidence that the insurance industry itself is part of the problem. ‘Jack Straw’s research is a powerful contribution to the debate and as well as hearing what he has to say I will want to hold the insurance industry and the government to account.’ The meeting will take place in the autumn, with a date still to be announced, and other witnesses will be called.last_img read more

Act on referral fees

first_imgIn recent times three core institutions of society have been rocked by crises. In 2007, the banking system came to the brink of collapse. In 2009, parliament was shaken to its foundations when countless members were shown to have falsified expenses. This year the tabloid press, in the quest for higher sales, has thrown ethics to the wind and is now paying the price in the phone-hacking scandal. Ethical and regulatory failure run as common themes through each. Recently, the controversy of referral fees, both those paid by solicitors and received by insurers, has been brought to the attention of the public – and the ensuing debate is overdue. The government is hopelessly off the pace. It must seize the initiative and amend the Legal Aid, Sentencing and Punishment of Offenders Bill to introduce a ban. If it fails to act decisively now, I fear the legal profession will find itself embroiled in the next chapter of the book which tells the story of ethical collapse in once-respected institutions of society. And this government, as well as the last, will be blamed for failing to act. Richard Edwards,E Rex Makin & Co, Liverpoollast_img read more

Turner prize

first_imgHis photograph made him ‘look like an undertaker’, but otherwise employment lawyer Gordon Turner (pictured) was happy with the critique of his firm’s new website. He had set Obiter and others a challenge. For every typo or error we found on the new website, he would donate £5 to our charity of choice. Obiter, who has done a bit of proofreading in his time, was able to raise £55 for the Kent-based Demelza Hospice Care for Children. Turner said: ‘I understood the points I was making and this was a good way to make sure that others understood them, too.’ He is now upping the stakes and will donate £10 to the National Society for the Prevention of Cruelty to Children for ‘every genuine typo or grammatical error’ that is submitted to him. Visit the website.last_img

No to HSBC

first_imgHaving received the 13 pages of instructions from Countrywide Conveyancing Services in connection with a HSBC mortgage it is providing to my purchasing clients, it is obvious that this new procedure is doubling the work for conveyancing solicitors not on the HSBC panel while leaving all the liability and risk with the firm acting for the purchasers. The latest story from a prospective HSBC borrower, as told to me by a client, is that she was told (over the telephone) by her HSBC relationship manager that she would be best advised to use its conveyancers, but if she chose to use an independent solicitor, that solicitor should reimburse her the fees she would have to pay for HSBC’s representation. The same client also told me that she had applied for a certain HSBC mortgage package, and when the offer came through the interest rate had risen by a significant percentage. This firm will not be giving the undertakings required by Countrywide unless we have clearance from our insurers, and I would urge other solicitors to protect themselves in the same way. Furthermore, we will not be accepting any new instructions from clients who will be financing their purchases through HSBC or any of its group. Helle Jacobsen, Jacobsen & Co, London SW6last_img read more

Legal letters

first_imgTo continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Get your free guest access  SIGN UP TODAY Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe now for unlimited access Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our communitylast_img read more

Living on one’s wits

first_imgSubscribe now for unlimited access Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community To continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Get your free guest access  SIGN UP TODAYlast_img read more

… or the Americans

first_imgGet your free guest access  SIGN UP TODAY Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe now for unlimited access To continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGINlast_img read more