Digital White Papers

December 2013: Business and Financial Management

publication of the International Legal Technology Association

Issue link: http://epubs.iltanet.org/i/231030

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MANAGING THE MIDRIFF: CORRECTLY PRICING THE BULK OF YOUR PRACTICE'S SERVICES MANAGING THE MIDRIFF by Alain Lemay and Danielle Olofsson of Dentons Canada LLP Conscious of being in an over-lawyered and under-cliented market in which consolidation is inevitable, it seems we price much of our work not to generate revenue or cover costs, but to undercut our competitors. The justification being that those firms without the processes in place to produce better work faster and more cheaply will end up bankrupt. But is pricing alone really the issue? Or is it simply a symptom of a greater discomfort — how to handle the midriff? TRADITIONAL PRICING AND PRESENT CHALLENGES Correctly Pricing the Bulk of Your Practice's Services Traditionally, law firms have set their billing rates to cover their cost structures. They have used a variation of a formula whereby a lawyer's salary is multiplied by a factor that depends on their level (the senior partner's factor being lower than that of the junior associate); add the following components: •Benefits •The lawyer's share of fixed costs (which can vary depending on status)

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