THE RISE OF THE PRICING OFFICER: The Business of Law Takes Center Stage.

• Author: Ors, Rose

They are a smart, passionate and focused group. They are a part of a slow but steady change in how the business of law is conducted. They are the pricing officers--a growing cadre of professionals being hired by law firms to establish a more analytical approach to pricing legal services.

The pricing officer and his or her team have been part of the corporate world for decades. But in law, they are, for the most part, the new kids on the block. Their new role in law firms is a response to a number of key market pressures. At the top of the list are clients' demand for alternatives to the bill able hour and greater accountability on how their law firms manage and staff their matters. Another factor is the ever-increasing role of corporate procurement. Many RFPs issued by large companies (especially the Fortune 100) for legal services include the procurement team as part of the evaluation panel. Some companies have a procurement team within the legal department. Lastly, as more law firms adopt the rigor of project management and other process-driven disciplines, the role of the pricing officer becomes important as a strategy of differentiation and competitive advantage.

The Experience and Scope of the Role

The experience level, responsibility and reporting lines of pricing professionals differ widely amongst law firms who have added this role. At the senior level, a few earned their chops in law firms in the finance or business development departments. Others are seasoned veterans from consulting and accounting firms. Some pricing officers report to the executive committee or managing partner, while others report to the chief financial, chief operating or chief marketing officers. At the other end of the spectrum are newly minted MBAs and other finance-trained newbies who are part of the accounting group and serve more traditional back-office support. The focus of this article is on the senior pricing role.

It should not come as a surprise that the role of the pricing officer in law firms--manager to director level--is not about determining the lowest price for providing legal services. As Steve Manton, strategic pricing leader at Debevoise & Plimpton, explained, "Pricing is not just about pricing. it's about win/win solutions that enhance relationships." in analyzing a new business opportunity, Manton works closely with the law firm's relationship partner, practice management leader and increasingly with his counterpart in the in-house legal...