Proving value, driving change and protecting profitability: Navigating a new era

Williams Lea was proud to sponsor Sandpiper Partners’ Fifth Annual Chicago Pricing, Profitability, and AI Conference, where law firm leaders, pricing experts, their corporate clients, and industry innovators met to discuss how economic uncertainty, a volatile market, and changing client demands are impacting pricing and profitability decisions. Here are the top takeaways from the discussion.

Profitability and data-driven decision making are inextricably linked

The law firm leaders on the panel all agreed that financial discipline is key to driving profitability. However, their firms take different approaches to instill financial rigor firm-wide. Some firms are focusing on education and building a “know your numbers” mindset, while others are instituting rewards and/or consequences for adherence to financial processes. Regardless of approach, the need to capture, analyze and report on key metrics lies at the heart of achieving the firm’s financial goals.

While the panelists cited several advanced tools they are using to assess profitability at the client, practice, partner, and matter level, they stressed the importance of creating context for the metrics. “Don’t just deliver data and information, communicate the monetary value tied to the data,” offered one senior pricing expert. “How much does a day’s improvement in average days to bill or average days to collect impact cash conversion or impact the bottom line?”

By clearly communicating the value of improving the metrics, firms can turn data into a powerful tool to drive desired outcomes.

For clients, predictability and results go hand-in-hand

With rates continuing their upward trajectory, the law firm client panelists spoke openly about what they valued in their law firm providers, with the biggest value driver being alignment with their goals. “We need our law firms to understand our unique business… Its challenges and objectives,” said one law firm client panelist. They added, “Then we need them to provide the advice that moves our business forward…it’s the art of smart risk taking. The clients all agreed that inviting their law firms to corporate conferences and events, even if they aren’t directly matter-related, is a good way to ensure a mutual understanding of the client’s objectives.

Clients are also increasingly asking their law firms to consider Alternative Fee Arrangements (AFAs), fixed fees, and outcome-based pricing, making predictability and transparency key inputs to the value equation. According to one client, “Rates are important, of course they are! But, above all, budgets are important…Our corporate legal teams live and die by budgets.”

Helping clients understand all aspects of a matter from scope, to timing, to budget is crucial to building the value the clients expect from their law firms.

Leaders and laggards: How firms are navigating the AI landscape

AI’s potential to drive efficiency and ultimately disrupt the traditional law firm hourly billing model was top of mind for law firm and client panelists alike. To meet the moment and safeguard against potential pricing and profitability impact, the panelists offered several suggestions around AI adoption, training, data management/governance and tackling the omnipresent “law firms’ resistance to change.”

Ensuring your firm has strong training programs to support AI technologies is paramount. It’s not just training on AI tools, such as prompt engineering or how to query the models but also training around how to discuss AI usage and pricing with clients. With many clients now asking for pricing models that both include and exclude AI use, several panelists stressed the importance of not defaulting to a “discount” approach for AI-augmented work. “While providing a pricing discount for AI might be the first reaction,” one panelist remarked, “we need to get people used to framing things from the client perspective and focusing on client outcomes.”

To effectively implement AI-based solutions, firms must treat their data as one of the firm’s most valuable assets, one that needs to be managed by a strong data governance program. Storing, integrating and standardizing data across the firm represents a unique challenge. “Breaking down data silos is a huge endeavor,” offered one law firm panelist. “Different parts of the firm use different taxonomies, and we need to find a common data language firmwide.” Investing in resources such as data managers and data scientists should be integral to a firm’s AI strategy.

With AI driving a faster pace of change than most lawyers find comfortable, the panelists tackled the all-important questions of where and how to implement AI and suggested several ways they are helping their lawyers overcome resistance to change. Helping lawyers embrace new technology can be a complex challenge, or as one panelist put it: “We look at managing change through three lenses: Technology gaps, knowledge gaps and inspiration gaps… And different people are at different stages of understanding and willingness to embrace AI, so we need to manage change differently across the firm.”

While providing training and support resources will go a long way towards driving adoption, asking attorneys to invest non-billable hours without knowing how successful they will be, is also a challenge that needs to be addressed. One panelist remarked: “We need to create a safe space for them to experiment and really lean in and use the tools.”

Amid a volatile landscape hampered by market uncertainty and marked by the complexities of AI, effectively managing and positively impacting pricing and profitability has taken on its own complexities. For law firms to thrive, they need to proactively embrace a value-based approach to all things, from client relationships to change management and AI adoption.

To learn more about how law firms are tackling these challenges and meeting the moment, download our 2025 Trends and Opportunities in Business Services, The technology revolution in legal support: Redefining roles and enhancing value in modern law operations.