In 2021, law firm pricing and project management professionals (LPPMs) demonstrated they can improve profitable delivery under unprecedented pressures. In this year’s survey results, we see the need for service innovation, process improvement, and supportive technology as pressing investments to optimize client value and firm profitability.
This second edition of the Legal Pricing & Project Management Survey polled LPPMs and analyzed responses in context with those captured in the most recent Law Department Operations Survey, which polled client representatives.
The findings reveal two persistent challenges: balancing client value expectations with profitability targets and identifying technologies to support pricing functions and operations.
The pandemic laid bare the vital role technology plays in connecting firms’ people, processes, and data. Survey findings reveal lawyers are willing to adopt new solutions, enabling accelerated investment in profitability-enhancing technologies.
As firms move through the innovation cycle, profitability expectations command new processes and technologies for budgeting, proposals, and fee arrangements. At Intapp, we understand the importance of matter financial management, consistent with survey findings.
Overall, survey results continue to highlight client-driven innovation: Clients want to work with firms that understand their concerns and offer service models that improve value.
Elevating the LPPM Function
The survey data captures insights into challenges facing the legal pricing and project management functions. Although new tools and technologies remain a priority, they’re second to improving client value and maintaining profitability, which dedicated pricing staff cite as their top concerns, both now and for the coming 3 years.
Legal operations staff responsible for project management are focused on identifying and driving adoption of technology to support efficient delivery. Survey data shows a broadly distributed set of equally weighted challenges on the horizon: documenting ROI, identifying solutions, driving adoption, and securing funding.
Survey respondents who manage both pricing and legal project management identify their top concerns for the coming 3 years as accelerating lawyer adoption of alternative service delivery models and breaking down lawyers’ resistance to change, which suggests LPPMs anticipate responsibility for these initiatives.
Overall, the data indicates accelerating change. Legal operations sits at an inflection point; we’re witnessing its transformation from tactical to strategic.
Meeting Client-Value Expectations
Survey data shows firms know they need to understand clients’ financial and operational challenges. With 94% of respondents agreeing that their firms expend significant effort here — a 14-point jump from 79% last year — it’s clear that client outreach has become the top priority.
Asked whether clients truly want firms to innovate, 75% of survey respondents say they do — a significant increase from 61% last year. Further bolstering innovation’s importance, 91% of respondents say their firms have implemented innovative solutions to better serve clients, a 19-point increase from 72% last year.
Last year’s survey results revealed three-quarters of respondents saw change management as their primary job function; in contrast, this year’s responses show a 14-point drop to 60%. This shift signals a change in mindset: LPPMs believe that they’re progressing from planning to execution.
Although firms apply mindshare to meeting client-value expectations, investment in technologies to support these efforts is lagging. Survey results show that well over half of respondents report that they don’t have the technologies they need to do their jobs — identical to last year.
Together, the data suggests that firms take client value delivery seriously but find themselves at the beginning of their journey to address it. At Intapp, we know firms need new tools and technologies that help them work smarter, not harder. Although these investments remain important, they’re secondary to improving client value and profitability.
Investing in Technologies to Close Service Gaps
Survey data measured the maturity of various operational functions: pricing, matter budget development and management, processes for outside counsel guideline (OCG) compliance, reporting and analytics, and profitability.
Findings indicate that firms have made progress on pricing, reporting and analytics, and profitability, with most respondents reporting their firms more than midway to maturity. However, matter budget development and management still lag, as does agility in adherence to client requirements and OCGs.
Anecdotally, clients are clamoring for matter budget development and management capabilities that directly impact the value they receive from their legal spend. Clients also appreciate full transparency, which speaks to an opportunity for forward-thinking firms to bolster this mission-critical function.
With 90% of respondents reporting their firms have never been terminated for failure to follow OCGs, it’s clear many have a blind spot in two areas: soft attrition and realization rates. Although a firm may not be expressly fired, frustrated clients fade out. Further, noncompliant bills get kicked back, extending the payment cycle and increasing the likelihood for write-offs and revenue leakage.
Survey results also show a 13-point drop in the belief that most law firms will be using AI for legal work during the coming 3 years, and a 6-point drop in the belief that firms will be using AI to predict future outcomes and events in the same period. This suggests firms are prioritizing wide-reaching, fast-moving technology initiatives to solve today’s challenges and serve clients readily, while pushing AI further down the roadmap as they acknowledge the inherent effort and investment required.
Moving Forward Together
The combination of heightened client-value expectations and mandated profitability targets presents LPPMs a tall order. Clients want their firms to lead the charge, offering innovative ways to increase the utility of their legal spend and providing alternative service models that better protect clients’ interests. Firms turn to their operations teams to improve efficiencies and deliver on profit margin.
Empowering firms and LPPM professionals to provide matter financial management is a priority for Intapp as we enable lawyers and LPPMs to gain immediate access to matter data to successfully serve in-house counsel needs — and their own.
To remain competitive, firms must invest in technology to improve client value and profitability. At Intapp, we’re proud to partner with firms to develop innovative service models and achieve their goals using the first and only connected firm management solution built specifically for partner-led firms.