Developments in the

legal pricing function:

Totum report 2022
 Table of contents
Welcome message: Martyn Draper, Totum 1

Part one: Pricing survey – Our findings 2

The pricing landscape 3

Structure and size of today’s pricing teams 3

The pricing leader 4

The pricing team 5

Purpose and remit of the pricing function 8

The future pricing team 11

Pricing team salaries 14

The commercial future of pricing 15

Part two: Pricing perspectives 16

Q&A: The changing world of pricing

Stuart Dodds, Positive Pricing 17

Establishing a team for the future of pricing

Adam Al-Shaybani, Reed Smith 19

The commercial shift

Adrian Avanzato, Ashurst 20

Optimising profitability
21
Nigel Laws, Withers

Contact information 22

Developments in the legal pricing function: Totum report 2022

Welcome message
In 2018 Totum launched its inaugural law firm
Pricing Report. This had been written in response
to a growing number of enquiries from clients
asking about what types of professionals were
being hired into either existing or newly created
pricing functions, what the structures of those
teams looked like, what they did and what the salary
brackets were for these roles. It was well received
and remains one of if not the most popular reports
the Finance team at Totum have produced.
Four years after our first report’s release, the
pricing functions of many of our clients have
dramatically expanded and with them the numbers
in the legal sector’s pricing community. As this
report reveals, it is now not unusual to have teams
of seven and more individuals, something unheard
of in 2018 when the largest pricing teams had
headcounts of approximately four.

Leading these functions are some of the most commercially focused individuals we have
come across in the legal services sector. They are driving far more transformation and
innovation in their firm’s approach to pricing and taking a broader commercial approach.
In the past four years, the remit and influence of pricing functions have also grown and, as
more people are hired from outside of the sector bringing with them fresh ideas, so too
has the sophistication in approaching pricing. Clearly this is a function that is not
going to be disappearing any time soon and, according to our findings, is expected
to continue growing.
In response to the headcount growth and expanding remit, for this report we decided to
survey leaders of pricing functions in the UK top 50 law firms and any international firms
with HQs outside of the UK that have a pricing capability in the UK. The findings have
helped us to shape what we believe is an insightful and interesting document that should
provide readers with a useful understanding of what is happening in pricing functions today
and where they will be heading in the future.
We were also very fortunate to be able to conduct several interviews with today’s pricing
leaders – the results of which can be found in part two of the report, Pricing Perspectives.
Thank you to Adam, Adrian, Nigel and Stuart for your time and candour. Thanks also
to everyone who participated in the survey, without whom this paper would not be as
accurate and revealing as we have been able to make it. We hope you enjoy the report and
would welcome any feedback you have on it.

Thanks, Martyn

Martyn Draper is Head of the Finance Practice at Totum. He works across senior
level finance recruitment at C-suite, Director and ‘Head of’ level – including titles
such as CFO, CFOO, Finance Director, Pricing and Commercial Director, Head of
Finance, Head of Partnership Tax, Head of Business Intelligence, as well as senior
Commercial Finance roles.

1
 PART ONE
Pricing survey:
Our findings

Developments in the legal pricing function: Totum report 2022 2

At Totum, we have worked with legal pricing functions for over
10 years, back when teams were still in their infancy or, indeed,
did not yet exist. Since then, we have watched them grow, gain
value and contribute massively to sustained growth in the legal
sector. Pricing played a critical role most recently through the
pandemic, supporting sustained law firm profitability through
uncertainty. But as the world shifts once more and firms face
new economic turbulence, the pressure is on for pricing teams
to continue to make a difference.
The to-do list for today’s pricing leaders is long and varied, typically including delivering
internal financial insights to support strategic decision-making, ensuring pricing
consistency across multiple matters and jurisdictions, implementing the right pricing
tools/platforms, conducting sophisticated financial modelling, supporting partners
in negotiating pricing terms with clients, and sometimes engaging directly with clients on
pricing solutions. The remit is daunting. As Commercial Director Adrian Avanzato, who we
interviewed for this report, says, it’s easy for pricing functions to get stuck very quickly.

With these complexities in mind, we decided to conduct a comprehensive survey of UK

pricing teams to determine exactly where we are in terms of this important function’s
evolution. Not only did we seek to find out the size and structure of today’s pricing
teams, but we also wanted to know how teams’ remits have changed and what this
means for the future. What became clear quickly is that pricing teams are becoming
a vital strategic lynchpin, operating at the heart of their firms.

Structure and
size of today’s Figure one: What is your firm’s total global revenue?

pricing teams 40%

34%

Overall, 58% of the top 50 UK 31%

law firms, plus international 30%
firms with pricing teams based
in London, responded to our
21%
in-depth survey, giving us
20%
insights into all aspects of their
functions as they are operating
in 2022. We also conducted 11%
interviews with key pricing 10%
leaders, and have published
some of those more personal
3%
perspectives alongside these
0%
survey findings. 0%

50
m 0m 0m 0m bn 1b
n
Most respondents (86%) came from
r£ £10 £20 £50 - £1 r£
e - - - e
larger firms, with a global revenue of over
Un
d
0m m m 01
m Ov
£5 01 01 £5
£201m a year, with 21% coming from £1 £2
firms with over £1bn revenue. Findings
therefore often represent larger functions
that may be at a more mature stage of
evolution – see figure one.

3
 The pricing leader
In terms of individual respondents, the majority
were either Heads of or Directors of Pricing,
although there was a substantial minority with
‘commercial’ in their title, including Commercial
Director, Head of Pricing & Commercial
Development and Head of Commercial Analysis.
This commercial leaning is a trend we will return
to on several occasions in this report. It was
also interesting to see a link in some titles to
operations and to marketing and business
development. If titles alone could tell a story, it
would be one in which the function is no longer
only ‘pricing’.
This hypothesis is reinforced by questions pertaining to the
remit of pricing function leaders. The vast majority (90%)
have a mixed remit, their role covering more than pricing. And
while managing pricing – or managing pricing team members
– certainly takes the brunt of their time (54% spend more than
60% of their time on pricing – see figure two) the breadth of
other responsibilities is considerable (see figure three).
In particular, 65% have some commercial responsibility taking
pricing firmly from tactics (managing costs) to strategy
(delivering sustained profit). Nearly a third (30%) chose the
‘Other’ option here, citing remits such as client relationship
management, propositions, change management and
investment decision support. Pricing is tapping into an
ever-wider set of responsibilities.

Figure two: If your role has a mixed remit, what percentage of

your time do you spend on pricing and pricing team members?
40%
35%

30%
Percentage of people

20% 19%

15% 15% 16%

10%

0%
0-20% 21-40% 41-60% 61-80% 81% or more
Percentage of time

Figure three: If your role has a mixed remit, what other areas does your role cover?

70% 65%

60%

50%

40% 38%

30%
30%
23% 23%
20% 19%
15%

10%

0%
s ce t l l er
LPM ines t our rcia rcia
me ing Client oardin
and g Oth
Bus gemen Res gemen omme o m t b
a a C C ou n n
Man Man acc tter
o
ma

Developments in the legal pricing function: Totum report 2022 4

The pricing
team
Figure four: Are members of your pricing team mainly in pricing-
specific roles or do most have a combined remit (for instance, an
LPM & Pricing Analyst)?
In terms of pricing-team
50%
size, most of our respondent
50%
firms have four to six team 43%
members while nearly a
quarter of respondents (24%) 40%
have seven to nine, or more.
That these larger teams 30%
will have developed a more
sophisticated, strategic, and
20%
potentially practice group
specific, outlook than those
in small firms seems likely 10% 7%
although not inevitable.
Smaller teams will, after all, 0%
have the advantage of learning Pricing-specific Combined remit Other
from those that have gone
before – as well as the agility
to move quickly.

Half of the members of today’s pricing teams are in pricing-specific roles although 43%
have a combined remit (for example, a combined LPM and Pricing Analyst role). Those
that specified ‘other’ to this question, again pointed to a commercial remit, including
‘commercial decision support’ and ‘pricing and commercial/profitability’ – see figure
four.

Most pricing teams are now following a hybrid model of working – with over half of
pricing teams working in the office for 40% of the time and 60% from home – see figure
five. As pricing expert Stuart Dodds says in our Q&A on page 17, this presents new
challenges for Pricing Heads and Directors, who must be able to balance a growing
workload with teams working both in the office and remotely. This may be particularly
tricky in a function experiencing such fast-paced change.

Figure five: How often is your pricing team now in the office (on average)?

Other 3%

Full-time remote 7%

Hybrid - 40% in the office, 60% from home 54%

Hybrid - 50/50 home/office work 7%

Hybrid - 60% in the office, 40% from home 29%

We are returning full-time to the office 0%

0% 10% 20% 30% 40% 50% 60%

5
 There was a complete 50/50 split to the
question on whether firms have team Figure six: If members of your team are overseas, where are they based?
members based abroad. For those that
do, there was a relatively even split in 40%
terms of location: 40% are in Asia, a third 40%
both in the US and Europe and 20% 33% 33%
in Australia – see figure six.
30%

20%
20%

10%

0%
US Europe Asia Australia

The challenge to source the right skills for these fast-growing

teams is reflected in the fact that an impressive 61% have now 61% of respondents
recruited people to their pricing teams with no previous legal have recruited people to their
sector experience. This includes hires from other professional pricing teams from outside of
services firms, accountancy practices, telecoms, and banking the legal sector.
and financial services (see figure seven).

Figure seven: If you have hired people into the team from outside of the legal sector, where have they come from?

80%

70%
61%
60%

50%
44%

40%

30% 28% 28% 28% 28%

20% 17%

10%
6% 6%

0%
0%
ncy
t nal ms ia ion r
Big
5 en and s CG Me
d
uct he
nta es em cies essio s l eco i ng rvice FM r Ot
u
co ic n a g
an of m Te n k
Ba cial s
e nst
Ac ract Ma nsult er pr es fir Co
p h vic a n
co t
O ser fin

Developments in the legal pricing function: Totum report 2022 6

In our view, this is a hugely positive
development combining the expertise Figure eight: From which other internal teams have you previously
of team members who understand the recruited into the pricing function?
nuances of law with pricing professionals
who can bring new and beneficial insights 50% 47% 47%
from pricing strategies undertaken in other
industries (some of which, like telecoms,
40%
have extremely sophisticated pricing
mechanisms – see our column with Adrian
Avanzato on page 20). 30%

Firms too have recruited pricing 20% 18%

professionals internally, mainly from
12%
commercial financing and revenue control
– giving a sense of the breadth and 10% 6%
skills making up today’s pricing teams.
Interestingly here, 12% have recruited 0%
l nue ting
rcia LPM nce
&
pricing team members from their BD &
o m me ng Reve trol m arke Fina unting
Marketing teams – see figure eight. This C anc i co n &
fin BD acc
o
is a small but telling number; while pricing
may still be seen as a largely finance
function, the recognition of pricing’s
relevance to BD & marketing remains an Figure nine: On average how regularly do members of your
imperative. With pricing such a key part of team get promoted?
effective pitching and client relationship
50% 47%
management, we see collaboration
between the two functions as key to
each function’s success. 40%
35%
Perhaps a surprising finding given the
relative youth of the pricing function, is 30%
that the majority of teams (54%) have a
structured career path for their pricing
20% 18%
team with team members typically
promoted every 18-24 months – see
figure nine. This speaks volumes for 10%
a function that has not only grown
quickly but has had to develop a career
development framework at speed to 0%
12-18 18-24 24
source and retain talent.
months months months +

54% have a structured

career path for their pricing
teams with team members
typically promoted every
18 to 24 months.

7
 Purpose and remit of the pricing function
The purpose of the pricing team is a key question facing pricing and broader law firm
leadership teams today. As Stuart Dodds says in the Q&A, one of the main reasons for
pricing functions failing to live up to their promise is lack of purpose – something that is
also an easy trap to fall into when teams are bogged down with day-to-day transactional
duties. This is why our survey asked several questions around the chief purpose of
teams and the top priorities for leaders over the next 12-18 months. In response, there
was an interesting alignment of views.
When asked to choose three options to describe the chief purpose of their firm’s pricing function, the highest number
of respondent firms (62%) chose ‘Train partners in pricing agreements/negotiations’, followed by ‘Financial modelling
to enhance profitability’ (55%) and then ‘Improve tools/platforms for pricing more effectively’ (45%) – see figure ten.

Figure ten: How would you describe the chief purpose of your firm’s pricing function?

Become fully-fledged 14%

commercial team
Work with LPMs to improve 10%
matter management
Align with practice groups to 21%
enhance team performance
Deliver pricing consistency and 34%
across jurisdictions
Engage with clients directly to 21%
deliver better solutions
Define value proposition to drive 34%
commercial decisions
Analyse the firm’s data to deliver 14%
business intelligence
Improve tools/platforms for 45%
pricing more effectively
Train partners in pricing 62%
agreements/negotiations
Financial modelling to enhance 55%
profitability
Improve pricing transactions / 24%
pricing arrangements

0% 10% 20% 30% 40% 50% 60% 70%

When leaders were later asked for their top three priorities for
the next 12-18 months, most respondents (62%) again chose
‘Working with, and training, lawyers on pricing principles’, followed
by ‘creating and implementing firm-wide pricing strategy’ (52%)
62% think that training
lawyers/partners in pricing
and ‘Working on pricing systems/technology’ (41%) – see figure
11. Supporting lawyers and partners to discuss pricing issues is both a chief purpose and
with clients will remain a key part of the pricing role ensuring the priority for the pricing function.
continued success of the client engagement process, especially
through times of uncertainty.

Developments in the legal pricing function: Totum report 2022 8

 Figure 11: In your pricing role, what are your top three priorities for the next 12 to 18 months?

Marketing and communication

7%
of pricing framework

Pricing personnel development 14%

and support

Pricing/data analysis 38%

Work on pricing systems/ 41%

technology
Integration of pricing with 21%
business management
Client engagement on pricing 7%
developments/strategy
Working with, and training,
62%
lawyers on pricing principles
Liaising with leadership team on
commercial objectives 38%

Agreeing specific pricing proposals 21%

on client matters
Creating and implementing 52%
firm-wide pricing strategy

0% 10% 20% 30% 40% 50% 60% 70%

Nor is it a surprise to see pricing technology/

systems loom so large across responses.
Technology investment is critical to all aspects
of today’s legal business, but it is arguably
particularly important to the pricing function
where systems give visibility to financial data and
transparency around the whole pricing lifecycle.
This is vital not just for optimising profitability, but
for effective client engagement and retention too
(see our column with Nigel Laws at Withers (page
21), who is currently working on implementing a
firm-wide pricing and profitability tool).

Meanwhile, more than a third (34%) of

respondents chose ‘Define the firm’s value
proposition to drive commercial decision making’
as a chief purpose of their pricing team, while 38%
of respondents chose ‘Liaising with the leadership
team on commercial objectives’ as a key priority for
the next 12 to 18 months.

At the same time, 14% of respondents selected

their team’s purpose to ‘Become fully-fledged
commercial team including pricing, BD, bids and
other essential functions’. Yes, this is a small
number but to us seems a significant statement of
intent – this is, after all, a considerable ambition for
what is still a relatively young function.

9
 We are also seeing pricing leaders seeking out the skills they will need for these commercial pricing teams of the future.
When asked ‘What skills/capabilities do you think will be key to the future of successful pricing teams?’, the vast majority of
respondents (82%) chose ‘Commercial/strategic thinking’, followed by ‘Internal relationship management skills’ (54%) and
then the ‘Ability to engage and work with clients’ (43%) – see figure 12.

This is a hugely telling set of results pointing to teams that are fast evolving to become highly strategic and commercial
functions that see themselves at the heart of the future legal business model.

Figure 12: What skills/capabilities do you think will be key to the future of successful pricing teams?

Ability to engage and work

43%
with clients

Project management skills 14%

Understanding/using and
implementing pricing 29%
systems technology

Financial acumen 14%

Change management
29%
experience

Internal relationship
54%
management skills

Financial modelling 21%

Data analysis 11%

Commercial/strategic 82%
thinking

Entrepreneurialism to
innovate pricing models 29%

0% 20% 40% 60% 80% 100%

Developments in the legal pricing function: Totum report 2022 10

 The future pricing team
Pricing teams are growing. Three quarters of
respondents are anticipating their pricing team
to grow in the next 12 months, with most (71%)
planning growth of one or two people but nearly
a third (29%) anticipating headcount growth of
three to four or more in that timeframe – see
figures 13 and 14.
Figure 13: Are you anticipating your pricing team to grow in
the next 12 months?
No 25%
Yes 75%
The reasons given for headcount growth are
interesting – see figure 15. In response to the
question, ‘What is the reason for the increase
in headcount?’ the majority of respondents
(76%) chose ‘To meet expanding remit of the
pricing team’. This was followed by ‘Expansion
to deliver commercial finance priorities’ (62%)
and ‘To enable better collaboration with fee
earners/partners/other business services
functions’ (62%) – all in keeping with our
conclusions drawn above.
11
Figure 14: What additional headcount do you anticipate?
80%
71%
60%
40%
24%
20%
5%
0%
1-2 3-4 5-6
However, 62% of respondents also chose ‘To keep up with
workload driven by overall growth of the firm’ and 57% selected
‘To free up pricing leadership for more strategic roles’. Will
pricing leaders be able to set the strategic/commercial agenda
for the future if they are overwhelmed with the day-to-day
workload? How can pricing teams prioritise the right, most
transformative, work if bogged down in the sheer volume of
tasks sent their way?
Indeed, when asked ‘From a people-management perspective,
where do you see the greatest challenges for a Pricing Director/
Head of Pricing over the next 12 months?’, the biggest response
by far was, ‘Managing heavy workload to prioritise the right
projects’, selected by 71% of respondents, followed by ‘Difficulty
sourcing the right level of pricing skills’, chosen by 57%. These
concerns appear to far outweigh most of the other options
listed, although ‘salary inflation’ is clearly another worry cited by
46% (see figure 16).
 Figure 15: What are the reasons for the increase in headcount?

Other (please specify) 14%

To manage the increasing

complexity of legal pricing 24%

To free up pricing leadership for

57%
more strategic roles
To enable better collaboration
with fee earners/partners/other 62%
business services functions
Expansion to deliver commercial 62%
finance priorities

To respond to client requirements in 38%

pricing matters

To meet expanding remit of the 76%

pricing team

Increased workload due to growing 29%

reputation of the firm

To keep up with workload driven by

62%
overall growth of the firm

0% 10% 20% 30% 40% 50% 60% 70% 80%

Figure 16: From a people management perspective, where do you see the greatest challenges for a Pricing Director/
Head of Pricing over the next 12 months?

Personal professional
development 18%

Securing budget to expand 36%

the pricing team
Demonstrating the value of 29%
pricing
Managing hybrid team 18%

Salary inflation 46%

Delivering ongoing training 25%

Managing rapidly changing
skills requirements 25%

Delivering structured career

development 36%

Managing heavy workload to

71%
prioritise the right projects
Lack of candidates with 18%
experience of legal sector
Difficulty sourcing the right 57%
level of pricing skills

0% 10% 20% 30% 40% 50% 60% 70% 80%

Developments in the legal pricing function: Totum report 2022 12

Certainly, in our experience, demand far exceeds the supply
of pricing professionals who can deliver the broad skills and
commercial mindset to meet the needs of a function that is
fast becoming more strategic. In addition, we work with firms at There is intense
various stages of building their pricing capability – from those competition for
just setting out on their journeys with no existing team or one talent raising real
or two pricing professionals, to those that are large, established concerns that great
functions with structured career development opportunities to team members will
developing pricing skills.
be poached by
Within this, there is intense competition for talent raising other firms.
real concerns that great team members will be poached by
other firms that can offer higher salaries and/or faster career
progression. Having said that, smaller teams will have the
benefit of offering candidates the opportunity to establish a
function, if not from scratch, then from its early days – offering
them the chance to establish a commercially-oriented function
right from the outset. This could potentially give them much
more exposure to senior stakeholders and strategically focused
work than they would get in a more entrenched function. As
ever, the reasons why one candidate will choose one role over
another goes beyond salary alone.

But the workload issue should perhaps be of greater concern.

This is clearly an issue for a function with big ambitions to
take a pivotal place in the legal sector’s commercial future. If
pricing leaders and their teams are forever distracted by the
day-to-day burdens of an increasing workload, it will be difficult
to achieve the goals that can have the biggest impact on the
future of their firms.

13
 Pricing team salaries
In a marketplace where candidates are in high demand, it is particularly
difficult to supply accurate advice about salaries as information tends to
go out of date quite quickly. The details supplied below are based on what
Totum has seen London-based firms paying pricing specialists at the levels
described as of September 2022. Unfortunately, we don’t have enough data
to be able to produce regional variations of this information but hopefully it
will at least provide a template, considering London weighting on salaries.
The job titles are those used most frequently; they are interchangeable with
other, similar ones.

Pricing Assistant £30 - £40k*

Pricing Analyst / Advisor £45 - £65k
Senior Pricing Analyst / £65 - £80k
Advisor / Accountant
Pricing Manager £90 - £115k
Senior Pricing Manager £110 - £130k
Associate Director, Pricing £120 - £140k
Head of Pricing £140 - £160k

Pricing Director / £180 - £300k + **

Commercial Director

Although in the US there have been a growing number of Chief roles (Chief Commercial Officer, Chief
Pricing Officer) we have yet to see that development in the UK legal market.

*Generally we don’t see graduate or school leaver entry roles into pricing – the most junior
positions are usually second jobbers who have had either direct pricing experience in another sector
or are transferring into pricing from a different law firm’s business services department.

**The wider breadth of this bracket will be dependent on levels of responsibility. For instance, a global
role in a Magic / Silver Circle firm will be towards the top end of this bracket, a national role towards the
lower end.

Bonuses
As with most other areas of law firm’s business services functions, bonus
schemes vary widely. More senior level roles (Manager and above) do
tend to receive bonuses more regularly, of between 10 to 30%. The
top end of that range is usually reserved for Head of or Director level
positions. Roles below Manager are often only up to 10% bonus, if at all.
The measurement of bonus payments is often split between firm-wide
and individual performance, with KPIs attached to the latter.

However, bonuses are almost always a discretionary rather than

contractual arrangement and often more arbitrary than metric-based.

Developments in the legal pricing function: Totum report 2022 14

What’s next? The commercial future
of pricing
Managing a heavy workload while delivering strategic objectives will be a
difficult balancing act in times to come but it is encouraging to see so many
pricing leaders have a vision for their path ahead. This is one in which pricing
teams deliver the commercial expertise to determine how all elements of the
legal business can come together to drive future profitability.
It is a future in which the pricing function is fully plugged into
the rest of the firm, not necessarily belonging to finance any
more than it is to BD and marketing, or indeed IT. This is a
vision in which pricing is part of a central, commercial hub
that deeply influences the evolution of the sector, making
law firms fit to meet the next demands of the 21st century.

15
 PART TWO:
Pricing perspectives
Conversations with pricing leaders 2022

Developments in the legal pricing function: Totum report 2022 16

Q&A: The changing world of pricing
Stuart Dodds, Positive Pricing
Stuart Dodds was one of the first Pricing Directors in the legal
sector. In this Q&A he shares his views on the changing pricing
landscape.
What are the chief changes that you have seen in pricing
functions in the legal sector in recent years?
Many firms are still looking to develop a pricing function while
others are increasing the size and impact of their teams,
recognising the contribution pricing teams have made to
good financial results through the pandemic – it was a bit of an
epiphany moment. There’s also much more awareness of the
influence of senior people in pricing, reflected in the number of
roles that have Chief in their titles – those now incorporating
titles such as Chief Pricing Officer or Chief Commercial Officer.
Finally, I am also seeing a greater shift to product and solutions
based pricing now and expect this trend to continue.
What are the key success factors for setting up a pricing team?
Visible senior executive sponsorship is key – pricing has to be
championed from the top. Who you bring into the pricing role is
key too. It is important to have very strong change management
skills throughout the pricing function – because you’re getting
people to change their behaviours – and entrepreneurialism,
taking knowledge and techniques from other industries.
Analytical skills, making data meaningful, learning from mistakes
and using technology to help in your pricing role are also
important in helping the firm deliver services to clients.
Many pricing teams start out from teams of one or two, but a
lot of teams are now as big as nine/ten or even 20 people. The
17
challenge is to make sure that you’re recruiting and retaining
those with strong people management skills (or with whom you
can help develop these skills) – who can manage the additional
challenges of hybrid working where team members will often be
working alone.
There seems to be a push to deliver a more commercial side to
pricing functions. What does this mean for the development
of the pricing function?
I’ve seen pricing functions move from operations/transactions
to a strategic level. In some firms, there may be a team of six
or seven managing all the rates of all of the arrangements they
have with clients. But in others, pricing has become much more
strategic and commercial. And those teams might not want
the noise of the transactional arrangements, which require a
different mindset and skillset.
It’s about changing pricing from a primarily finance-based
function to one that is more business development and sales
aligned and some firms may not be comfortable with that.
Many pricing people don’t necessarily understand the technical
aspects of law (and that isn’t the main focus of their role
anyway) but they DO understand the importance of value and
making sure work is appropriately profitable. That’s going to be
important as firms start to work out the nature of legal services,
when it’s not by-the-hour arrangements but delivering legal
solutions or highly complex matters instead.
In that context, there will be a rise in commercial roles. However,
this rise will be tempered by the ability to source enough people
with the right experience. Not everyone can do it – it requires a
huge amalgam of skills – from a skills perspective it has become
the new pricing ‘unicorn’.
What is the role of a Commercial Director?
The commercial role is always looking to what can be brought
together and optimised out, whether by using technology
or delivering solutions in a different way that also delivers an
appropriate profit. It can span client selection, through client
onboarding, through to delivery of matters and (potentially)
exiting from certain client relationships, to name but a few of
its elements. And that’s a pretty challenging role especially
when you have strong-minded partners who may not be willing
to accept that elements of what they do can be made to be
more packaged or repeatable in nature (no lawyer likes to feel
‘commoditised’)…
This commercial role won’t work for every law firm – it will be
driven by pricing function maturity, those in the pricing role
themselves and, importantly, the underlying firm culture. But for
those firms where the ‘right combination’ of factors exists, there
are significant opportunities in improving underlying financial
performance, delivery efficiency and client satisfaction.
 What is the link between pricing and legal project
management (LPM)?
I have managed pricing and LPM. When we talk about pricing
we talk about a process, it’s what we receive in exchange for
our services. It’s not just what the price is at the beginning,
it’s what we get at the end. Pricing delivery is therefore very
important – and it’s that which links LPM and pricing whether
they’re separate functions or combined.
But there is a difference. Pricing in terms of costing can be
thought of as who’s going to be doing the work, how long it’s
going to take, what is the budget, and what do we manage
against? But then pricing moves to a more strategic level: what
is the market telling us, what does the client value? If an LPM is
coming up with the budget and work plan etc, they might share
that with the pricing team and ask if that changes the way
they would approach a matter. LPM can often be more detailed
in focus and transactional in nature, whereas pricing is often
more strategic and relationship based, but they have to work
well together.
I don’t’ see pricing and LPM roles directly linked as much these
days – they’re typically team mates. Often they come together
as part of a Legal Operations Team or similar. But by building
and developing very rounded skills, they can flip between their
roles quite often and they need to understand what each other
does very well.
What do firms chiefly get wrong in their pricing functions?
The first thing they get wrong is not having clear
sponsorship, which drives stronger visibility and
engagement of the function and can help support quick
wins. And then it’s not having a clear plan of what you want
to do. You need a road map or direction of travel even if the
plan changes over time.
As pricing teams have become more valued, they can also be in
danger of getting sucked into day-to-day tasks, which means
they can get diverted from the transformational goals that can
really impact a firm for the better.
Developments in the legal pricing function: Totum report 2022
Expectation management is also key – how much can a team do
and what should they prioritise? A pricing team may spend as
much time pricing a small deal as a large one. This doesn’t mean
they shouldn’t focus on smaller deals, because they might all add
up. But they need to consider where to allocate scarce resources
to have maximum impact on the firm.
What trends do you see for the future of pricing functions?
Pricing teams are going to increase their influence – and
have much greater focus on technology when pricing and
managing a matter, and in how to more effectively integrate
technical solutions in the delivery of legal solutions (and be paid
appropriately for this efficiency).
A pricing function might not be right for every firm – for example,
smaller firms may find the investment required to bring these
skills in house on a full-time basis challenging; developing the
skills of partners and fee earners through external training may
be a more cost-effective approach.
But for any business of any size you need to have someone
who can drive your approach to pricing rather than making it a
responsibility for everyone, which ultimately means that no-one
is responsible.
Stuart Dodds is Co-founder and Principal of
Positive Pricing. He was one of the first and
longest serving pricing and LPM directors in
the industry, working firstly with Linklaters
and then Baker McKenzie having previously
been a Management Consultant for 18 years.
Since co-founding Positive Pricing in 2018, he
has subsequently worked with over 50 leading
professional services firms.
Stuart may be contacted at
stuart.dodds@positivepricing.com or via
www.positivepricing.com
18
Establishing a team for the future of pricing:
Adam Al-Shaybany, Reed Smith
Winning a large multi-million pound bid for KPMG set Adam
Al-Shaybany on a path to proactive pricing that is helping to
innovate thinking at Reed Smith.
Adam Al-Shaybany has a full and varied career background,
having worked for the Walt Disney Company and then the 2012
Olympics in 2006 after the announcement that London would be
the host city. But it was his 12 years at KPMG that proved pivotal
as it was here that as an accountant and financial modeller he was
instrumental in KPMG winning one of the biggest bids it had ever
done – valued at £75m.
‘I was only a manager at the time and it scared the hell out of
me but it was probably the biggest career tick I’ve ever had
in my life,’ he says. ‘All of a sudden I was surrounded by senior
people who wanted me to work on another massive multi-
jurisdictional bid and I got a taste for it. That success really
developed my personality.’ It also led him to a pricing function
in law, at Reed Smith.
When Adam joined the firm as Head of Pricing in 2020, Reed Smith
had an established pricing function, but it was still in its infancy
and essentially focused on standard discounts. In little more than a
year, he was promoted to Director of Pricing and LPM, because he
was able to bring a financial scenario/modelling aspect to pricing,
the thinking out of the box that he’d learned at KPMG. ‘They were
the things that the Big 4 had already nailed but the majority of legal
firms had not got there yet. We are never going to get rid of the
billable hour but alternative fee arrangements are so important
and make a significant difference to profitability,’ he says.
There were four people in the pricing team when he joined,
including Adam, plus two from a billing background, and a revenue
controller. There is now a team of eleven for EMEA, and a major
strategy is to align themselves with practice groups. Unusually
for a functional director, Adam still does hands-on pricing work
19
himself, working heavily on his own modelling for two practice
groups, real estate and employment. ‘It’s really important to
show that you’re getting as stuck in as everyone else. Partners
know that I’m always there to discuss issues and I always have
accountability,’ he says.
The constant work in challenging time frames means that an
important part of his role is keeping his team interested and
engaged. ‘We’re a close team and one of main things that has
helped is that I’m doing the same work, so we’re facing the same
challenges and we massively respect and support each other.
We have challenges of course but overall the team is very strong,’
he says.
One of Adam’s chief concerns is losing great people to very
established pricing teams in other firms. He has to make sensible
decisions on resourcing – not just putting pricing people in
every global office if there’s no demand for it. But without those
opportunities, there’s always the risk the team members will seek
‘their kicks’ elsewhere. ‘One of the first things I did last year was
recalibrate everyone’s salary – which wasn’t easy but necessary,’
he says.
In EMEA, there are also four legal project managers (LPMs)
and they work very closely with pricing. ‘We have one senior
LPM manager and three other LPMs who work on a variety of
accounts and clients,’ Adam explains. ‘Sometimes those LPMs
are overrun with work and a pricing person will go over to support
them. It’s really important that we work together – I’m very keen
to collaborate, with both pricing and LPM scoping out projects
together, if it’s a big enough job.’
An essential element of today’s pricing is supporting partners.
‘When I first joined, partners would be really scared to go back to
clients and say rates need to increase, for fear of losing the client.
One of the things I’ve tried to instil is to look at competitors and
to understand the value you add. You need to have the confidence
to talk to clients and even walk away if needed. It’s all about
giving partners the narrative to talk to clients. I had training in
negotiation skills and I benefited from it enormously,’
Adam sees pricing working with other functions as vital to its
evolution, with pricing, BD, legal operations and innovation
teams working together closely to meet client needs. ‘All sorts of
innovative things are coming out in smart resourcing, intelligent
pricing, technology and AI, and, within that, business services
professionals need to come together to act as consultants and
deliver extra services to clients,’ says Adam.
In a community of business services professionals, Adam is
putting in place the kind of pricing team that will play a key role in
shaping the commercial mindset of the future.
Adam Al-Shaybany is Director of Pricing
and LPM, Client Value, EMEA at Reed Smith
 The commercial shift:
Adrian Avanzato, Ashurst
Adrian Avanzato, Global Commercial Director at Ashurst, has
worked in the commercial space for 25-plus years. He brought
to law a different perspective, one that is taking the pricing
function to the next level.
Adrian Avanzato’s background is more commercial than strictly
pricing as he spent the early years of his career working on
the ‘honed pricing strategies’ of the airline industry and the
high-value, highly-complex pricing solutions of the telecoms
sector. Both prioritised the kind of commercial thinking he
has introduced to law – as he was one of the first pricing
professionals globally to join the sector from outside industry.
‘In telcos, you’re managing the whole commercial lifecycle,
dealing with contract issues, negotiation, sales, pitching. The
commercial person is there from the start, ensuring that risk
is mitigated and that we are creating a value proposition and
making sure internally we have the operational set up to deliver
what we say we will deliver. That’s how it works outside of legal,’
says Adrian.
With this commercial experience he first joined the legal
sector as Head of Pricing at Norton Rose Fulbright (2011),
then Pinsent Masons (2017) and, most recently, in his role as
Global Commercial Director at Ashurst. ‘I could see the massive
opportunity in law. There was a shift in client buying behaviour,
law firms were beginning to recognise that pricing is much more
than an hourly rate, you can create value with price,’ he says.
In his time in law, he has started pricing functions from scratch,
and brought in more people from outside industry, including
more professionals from the telecoms industry. But perhaps
his most exciting contribution is in shifting pricing to a more
commercial function, something that is a priority for him now in
his current role.
Developments in the legal pricing function: Totum report 2022
He always saw the potential to go further with the pricing
function at Ashurst, not just setting it up from scratch, which
he did, but giving it a commercial dimension. ‘We are more
entwined with the commercial life-cycle, not just pricing but
looking at the engagement piece: value propositions, trying to
improve commercial outcomes of all aspects of Ashurst. I have
far greater reach across the business,’ he says.
With that comes a focus on commercial terms: how the firm
negotiates with clients, how it defines value propositions,
practice economics, matter management and operational
processes (tools and platforms). Although the function sits
within finance it is a separate commercial function including
pricing and business management. ‘Rather than just talking
about pricing, we also focus on efficiency, how we get our
data, internal process improvement, identifying opportunities,
defining what value is and how that fits into pricing – how do
we get the firm to do the right things in the right way? We
are effectively acting as change managers and we have to be
plugged into everything,’ he says.
The function is also moving to become client-facing. ‘It’s a
slow process requiring change from us and the business. But
it is beneficial – clients like the idea of us being involved as well
as others, like BD. It’s about moving from a single one-to-one
relationship to a wider, more cohesive and dynamic approach,’ he
explains.
‘It's easy for the function to be very niche and it gets stuck
quickly,’ he adds. ‘But by having a broader commercial function
we are in a position to try different things – around partner
value-adding activities, providing education and advice, and
support all around the commercial space. There needs to be a
change in thinking about the purpose of pricing – what do you
want it to achieve in the long term?’
For Adrian, pricing has to be connected into the whole business
as well as plugged into clients and what they value. ‘Solutions is
where it’s at, bringing it all together,’ he says. ‘How do you price
those different elements up? How do you communicate the
value of them? How do you use systems and tools? How do you
bundle multi-line item solutions? This is akin to how it’s done in
other industries.’
Adrian and his ilk are bringing into law firm pricing a broader
commercial focus that takes pricing from an operational to
highly strategic outlook. It’s an exciting path that puts pricing
at the heart of serious innovation in thinking about what
constitutes a modern legal business that truly understands the
meaning of value.
Adrian Avanzato is Global Commercial
Director at Ashurst
20
Optimising profitability:
Nigel Laws, Withers
Nigel Laws, Head of Pricing at Withers, has been part of the
legal pricing world right from the start. Here, he explains how he
is using his experience to build the pricing function at Withers.
Prior to joining Withers, Nigel Laws worked for 16 years at Allen &
Overy (A&O), rising through the ranks from Revenue Information
Coordinator and Financial Analyst to his first Pricing Manager
role back in 2011 in the early days of law firm pricing functions.
His time at the firm culminated in the role of Senior Manager,
Pricing and Commercial Projects from 2018 to June 2020 – a
trajectory that in itself says something about the changing
pricing landscape over the years as it has become increasingly
strategic.
He recognised the importance of pricing in the wake of the
financial crisis of 2008, when law firms were coming under
strain to maintain profitability. ‘This only increased with clients
investing heavily in legal procurement functions,’ he says. ‘Law
firms had to get better at pricing and there was an opportunity
to help the firm's relationship partners front up to the challenge
of fee negotiations to secure good outcomes.’
He has since seen pricing functions change considerably.
‘Pricing teams are now much more common and they have
grown in size and influence, becoming an accepted part of the
support structure as partners face growing price pressure
from their clients,’ he says. ‘The function has also broadened
its commercial influence although individual teams may vary in
terms of the day-to-day support they provide.’
He joined Withers in 2020 as Head of Pricing, bringing
with him wide experience from A&O of advising on pricing
21
and commercial strategy, optimising short and long-term
profitability and ensuring client satisfaction. These are skills
that he is putting to good use in his current role, taking the
pricing function from its infancy, initially as a ‘one man band’,
and then with a Senior Analyst who he recruited to support his
growing workload.
For the first 12 months at Withers, it was about putting the right
foundation in place, and building out a new pricing programme.
‘It was a clean slate and I have found that opportunity very
fulfilling,’ he says.
And now, amid his many duties, he is busy rolling out pricing and
profitability software – a matter budgeting, pricing and tracking
tool, which delivers data on budgets and costs that support fair
pricing arrangements and help the firm secure better financial
outcomes. ‘The fee-tracking and reporting capability really helps
communication with the client, both in the initial stages and
throughout the engagement,’ says Nigel.
‘Good pricing tools are a key part of the pricing jigsaw,’ he adds.
‘They allow for more informed data-driven decisions when
pricing and staffing work, and also serve as a central focus
around which you can build additional pricing infrastructure and
communication channels with partners.’
Beyond the importance of putting in place the right toolkit, he
describes change management abilities and commercial acumen
as key features of delivering good pricing and profitable growth.
‘It’s important to have the strategy in place first with the backing
of senior management. And then stick to the plan and reinforce
your messaging as you go along. Our programme here at Withers
focuses on five key areas: governance, data, toolkit, charging
practices and developing a commercial mindset,’ he says.
Right now, predicting the future direction of pricing functions
is tricky with there being so much volatility and change in the
world, he says. Pricing professionals will need to be alive to
change – it’s a risk to stand still – and continue to be prepared
to put their heads above the parapet. ‘With high cost inflation,
law firms have got a tough year ahead. Optimising profitability
through sound pricing will be key,’ he says.
That pricing has already proved its value through uncertain
times, and is populated with leaders like Nigel who know how
to meet change head-on, will no doubt put pricing in a central
position to help firms ride out whatever storms lie ahead.
Nigel Laws is Head of Pricing at Withers
 For more information,
please contact:
Martyn Draper
martyn.draper@totumpartners.com
Dee Deol
dee.deol@totumpartners.com

To find out more about Totum Research,

please contact:

Caroline Poynton
caroline.poynton@totumpartners.com

Developments in the legal pricing function: Totum report 2022