Originally recorded on the Pricing Matters Podcast by Digitory Legal. Digitory Legal is now part of BigHand. Learn more here.

Welcome back, Frederick J. Esposito, Jr, MBA, CLM, Chief Operating Officer of the regional law firm Rivkin Radler LLP. Fred has more than 25 years of law and accounting firm experience and has been a Certified Legal Manager (CLM)SM since 2006. Fred specializes in financial and organizational management and has managed and worked in a consulting capacity with several law firms, both international and domestic. Fred brings considerable “real world” experience to his role as a speaker and educator. Also, he is a senior member of the faculty and a consultant for the Legal Lean Sigma Institute LLC. In May 2018, Fred earned a Yellow Belt Certification in Legal Lean Sigma® and Project Management and is working toward his Green Belt Certification.  

Fred recently published an article for the Legal Executive Institute "Process improvement & project management in the new “new normal” where he shares his views on why firms need to embrace fast-track process improvement methodologies. 

Top three takeaways from this episode

• The pandemic is shining a light on process improvement. Now is the time to review what is working and what is not working.

• The crisis will bring opportunities. Firms will be re-evaluating their business models, including their service delivery and business development processes, and these changes will impact the pricing strategy.

• Fostering client relationships. Efficiency, value, and focus work in equilibrium to strengthen the client relationship. 

Change is a funny animal and I think that when people are put to the test, I do believe that the human spirit or the resilience of people, I don't think it should ever be underestimated, because I think people really will rise to the occasion.

Podcast Transcript:

Frederick Esposito  
All I can say at the end of this is that it's one of these situations where it's going to play out. We're still in its infancy and this is the way it looks right now, but the landscape will always continue to change. So it'll be interesting to see where we are in six months and that I think would be the real ticket.

Aurelia Spivey 
Welcome to Pricing Matters, a podcast by Digitory Legal. Digitory is a data analytics and cost management platform and service, bringing data-driven pricing and cost prediction to law. My name is Aurelia Spivey, and I will be your host as we speak to leaders who are making an impact in legal pricing, discuss market trends, and find out from them why pricing matters.  

Good morning and welcome to the Pricing Matters podcast. This morning we're speaking to a guest that we spoke to earlier in January, it's Fred Esposito. He is the Chief Operating Officer at Rivkin Radler. Good morning, Fred.

Frederick Esposito  
Good morning. How are you?

Aurelia Spivey 
I'm good, thanks for asking. At this time, I think it's always helpful to lead with that question. I'm doing fine, my family's fine, and we are all healthy still and lucky to be doing the work we're doing. How are you doing?

Frederick Esposito  
I'm doing very well and I'm grateful for that. Most of my colleagues are also doing very well, I think folks are doing the right thing but it is a very surreal environment now, I find. It's changed the landscape a little bit. But otherwise, being change managers and change agents as we are, I think we're doing pretty well.

Aurelia Spivey 
I'm glad to hear that. So for our listeners, when Fred and I spoke in January, one of the pieces that we talked about was project management and process improvement and how 2020 is going to bring a renewed focus on process improvement and project management. That was going to be a way for law firms to differentiate themselves in the next decade. I don't think either of us predicted the situation that we're in now, with COVID-19 and working from home and all the shelter-in-place orders across the country. But I thought it was helpful to bring Fred back on to really talk about how the crisis that we're in has accelerated the need for process improvement and project management. Talking about the difference between 2008 and the situation we find ourselves in now. So we're going to have a final conversation, a helpful conversation for our listeners. So Fred, one of the first questions I wanted to ask was what do you think we can learn from the 2008 recession, in terms of these topics, and what we're doing in pricing and process improvements? 

Frederick Esposito  
Well, I think to begin with, the 2008 scenario was characterized as the new normal because it definitely had an impact on the landscape of the profession in terms of pricing and business development, and so on. As we've talked about this in the past, I think what it did really was shine the light on value, client focus, as well as efficiencies. But I think one of the byproducts of all of that, that came out of it, in addition to the pricing, which seemed to be an enigma to some folks, and I think it still is to this day, was the resurrection and the focus on project management. We all had to learn how to better manage our legal resources in terms of producing work, especially under a new fixed fee arrangement or a new alternative fee arrangement, whatever the case may be. 

What happened in 2008 is we saw a lot of fixed fee firms popping up, that were doing work first on fixed fees but then it evolved into portfolio pricing and all sorts of different permutations of the same concept. I think that worked very well for some firms and it didn't work well for others and I think it was because folks got thrown into it rather quickly and I think firms where the immediate reaction to 2008 was to immediately cut expenses. I think that's a knee-jerk reaction and when we get into talking about the pandemic, I think we saw a lot of that as well. I think what's happening back then is going to replay itself a little bit now but one of the good things I can say is that we now have some sort of a working foundation of where we came from, almost 12 years ago, to where we are today. I think that there are some lessons learned. I think the project management scope is still very valid to this day. 

I think that alternative fee arrangements have evolved considerably since that time, they become even more sophisticated, and some firms, and we're seeing more and more firms as a norm, either working with these arrangements exclusively or they are doing a combination or a hybrid arrangement where they're working with hourly rates, in addition to special fee arrangements. I'm finding that even big institutional clients like banks and insurance companies, and so forth, and in-house counsel now are asking for these types of arrangements. So that has been the legacy of what happened then. 

What has happened now, and we talked about this in January, you know, I've gone on the record and said, I do believe that the, we have an uncertain economy and I do believe that we are heading towards another 2008. Unfortunately, this pandemic, nobody saw it coming and when it did hit, it basically is accelerating trends that I think would have been happening probably later this year, but I think the uncertainty of the economy now, especially in light of what's going on in the country and around the world, with respect to the pandemic, where businesses and societies are basically shutting down and for the greater good. But it's created a whole new landscape and I'm going to speak to that in terms of professional service firms, particularly the legal industry. 

Aurelia Spivey 
That brings me to my next question, what are you seeing firms doing now in the pandemic, in terms of process improvement and how we manage pricing?

Frederick Esposito
I can tell you that, from what I'm seeing right now, I'm seeing a lot of symptoms from the 2008 scenario. I think the immediate urgency to cut expenses, was a knee-jerk for a lot of law firms. I still think that was the case. This was even before there was any talk of the PPP (payroll protection plan) that was coming out to assist businesses and so on. I can tell you that firms immediately went to cut expenses with respect to personnel. They were cutting back staff or they were cutting back lawyers. I think most of the firms that I've spoken to dealt with it in terms of furloughs, in some cases, or reduced compensation firm-wide by maybe 20 to 30%, some firms maybe even as much as 50%. So every firm was different and I think responded according to their own economic platform. 

There are some firms that have been fortunate enough that they did not have to furlough employees, which is more power to those firms that were able to do that. Many firms have also taken advantage of the PPP, as I'm going to refer to it from here on in, and again, it was a very cumbersome application for law firms. The rules kept changing, the deadline was what it was. A lot of firms applied for the funds, some firms got the funds rather quickly, while other firms did not. But it still became an evolving piece in the sense that not only did firms start cutting expenses, but some of the firm's expenses themselves were being eliminated. For example, when each state exercise could shut down, many law firms had already started, maybe a few weeks before because they saw it coming, and most did, to start getting used to the idea of working remotely. Making sure all of your lawyers could work from home, making sure your paraprofessionals and paralegals could work from home, and making sure your legal assistants could work from home to support their attorneys. 

So there were all these different things that firms were putting into place, then it actually got to the point where everything shut down and basically law firms, the trigger was pulled, and all law firms and professional service firms were working in a remote or virtual law firm environment. When that happened, first of all, you're not in your spaces, so there are little things that you would normally spend money on that you're not going to spend money on. So through an organic process of offices being shut down, some of the expenses other than rent or other occupancy-related costs, but a lot of your promotional expenses to some extent may have decreased. Your compensation, of course, and your payrolls may have decreased because of percentage reductions, to get firms through the rough spots. Some of the office expenses, supply expenses, and a lot of different things depending on the size of your firm and the impact they have on your bottom line, a lot of those expenses went away. One of my pet peeves has always been food. Every law firm I know buys way too much food, and those are numbers that add up, especially for the smaller law firm. So these are expenses that somewhat dissipated over this period and now we're looking at six weeks to two months so far, and this will probably go for 90 to 120 days. But my reaction is that even though it's a knee-jerk to cut expenses immediately, I think the bigger question is, what are you going to do to sustain your billable hours? What are you going to do to sustain the work, to keep the work moving? 

Firms that have multiple practice groups and diversity and practice groups, some firms that have institutional clients, for example, in the insurance coverage arena, or maybe even in banking to some extent, those practice areas may sustain themselves very well. In fact, it may even create opportunities for new work. I believe I have seen that not only in my firm, but in others, but you're seeing a definite uptick in property coverage claims with respect to COVID-19. Employment, especially in the employment arena, how to handle HR issues and dealing with COVID in the workplace. We're also seeing real estate, we're seeing leases being renegotiated among large real estate companies. So it is creating its share of opportunities but on the flip side, there are also other practice areas that may get stalled. For example, in corporate work transactional practices may feel the pinch, and litigation may feel the pinch because the courts are closed. T&E work to some lesser extent, because of the surrogates. So while some of the court systems are trying to make do, what I have found so far, is one of the inefficiencies is that maybe the court systems, while they are coming up to speed, maybe they could have thought this through and been ready for the virtual deposition or the virtual courtroom experience. It's not a brick bath by any means, but I think that's one of the things that would be a good example to observe during this type of pandemic because maybe you wouldn't have even noticed something like this during the normal course of business. 

That also stems into the law firms themselves. Now that we're working virtually, we have opportunities to see things that work or don't work, based on this new reality that we're all living in. It's definitely a climate of change but I also see it as a climate for opportunity, but also innovation, and ways to really beef up and put process improvement, on the uptick, and maybe even on steroids to some extent. You can really push that forward because I do believe that this new normal has created those opportunities to take a hard look at how we do things. We now have the opportunity to take the time internally, to really review those processes and to really take a hard look and see what's working and what isn't. I've taken full advantage of those opportunities for my firm.

Aurelia Spivey 
What advice would you give to people who are listening, and who are seeing those gaps in the process? What should they do to make the improvements? I know, we talked about process improvement on steroids, it is on a fast track, what steps could they take to ensure that they actually get it right?

Frederick Esposito  
The lessons from 2008, for those who remember them, I think it all kind of was a deja vu moment. I think that what is better is we're not working in the dark as much as we did 12 years ago when this first hit and it just shifted the entire profession in terms of how we did business. It changed the business models of how law firms produce legal work and how they ran their firms. We'd had a little experience with this. So now we have tools and things to draw on and resources to draw on, but we've also had an opportunity to learn from the mistakes we made in the first time around. I think there were a lot of mistakes that we all made with respect to pricing and also the different types of pricing because you read stories about law firms that tried to be competitive in that market and they couldn't be. So they either merged with larger firms or they ended up closing shop. It was survival of the fittest. 

By virtue of this pandemic, I think we have similar circumstances that may arise down the road from an economic standpoint, because I think the fact that shutting down, some firms have practices that will be conducive to generating revenues for their firms, at least, to get them over this hurdle. I also think there are other firms out there that are not going to. I think the days of looking at process improvement, or project management, and pricing in general, and coming up with fee arrangements that firms can live with. I think we got to get away from this, like as I've said to you, before, offline, the idea of playing Twister in the dark. You have to really have the lights on and see what's really going on and see the impact. If you're going to throw your left foot green, you're going to know where the right foot is going, and what the result of that is going to be. So I think what it's done is, we now have a groundwork to really take a hard look at what we're doing and the beauty of this scenario is that many of these will manifest, and I hate to put it this way, many of these will manifest as operational issues or problems, and maybe bottlenecks. Things that are going to slow up the productivity or hinder the attorneys from producing the legal work that they need to produce on a profitable level. 

So I have found from my own experience, these things have popped up and it gave me the opportunity to just think about it, step back, and just think about it practically, and how to look at the process and how it works. We've talked about the different methodologies for process improvement and as I've referenced before the DMAIC acronym. In DMAIC we trust, where you define, you measure, you analyze, you improve, and you control the results. That's why I refer to what's happening in today's climate as project process improvement on steroids because you're basically going through these steps rather quickly, to come up with quick fixes or solutions to problems. They are problems that you can correct, that can enhance efficiency, or improve productivity, which is what you want to do. The key here is, while I understand the need for expense reduction, some of it is going to be organic, and some of it is already in place, but I think the bigger picture is looking at your revenues and making sure that your lawyers have enough to do and o keep the accruals up, to keep the billings up. Then of course dealing with the other challenge that firms are going to face is the collection aspect. Our clients are going to have problems with this economic downturn, especially in light of the pandemic. So we're going to all have to work with that hand in hand, some firms are going to probably do very well, and others are going to struggle. That's where I think we're going to see more of an instant replay. Even though project management itself was a nice byproduct of the 2008 scenario, I'm finding now that 2020 is going to present its own challenges in that arena, to do just that. I think we're going to have to be very careful with respect to not only spending, but I think we still need to continue our focus on business development, and how to turn these lemons into lemonade to create business opportunities for the law firm.

Aurelia Spivey 
When you were talking it through, I was wondering about the people part in that. You mentioned the sort of processes that were hindering work being done. How have you found the people's response to change? And any tips that you have in terms of guiding others through that.

Frederick Esposito  
I can tell you, one of the things we had, was a few people, especially at the staff level. We had a lot of senior lawyers, of course, who were not very technology savvy and the concern was, well, how are we going to work through this. I am pleased to report, at least from my firm's perspective, everybody has risen to the challenge. I mean, change, this was a change, that was pretty much pushed on all of us, at the same time. We really didn't have the luxury of the time to adjust to it, but we did and it was basically everybody managed to get into the rhythm. In fact, now that we've been in it for almost six weeks, to some extent, it seems so much longer, I think people have learned how to manage the change of working from home. Some of them the lawyers, in particular I think have managed to very well. In fact, now there are conversations going on about return-to-work initiatives and what I'm finding is that many lawyers are saying we can work from home. We can continue to work from home for the time being and only bring staff into the office when we need to, especially when the courts start opening up. I think once the courts start accepting new filings and everything else, all of that litigation, and some that were postponed, is now going to hit the wheelhouse again and I think that's when things are going to start picking up. 

But still, I have found that the key to it, and this kind of takes us off the economic trail and more into the human resources or the behavioral management arena, is I have found that the constant messaging from in my firm, the management, managing partner, and myself, there has been a lot of ongoing communication. We have kept the staff, including the staff, in everything that's going on in the firm, it has not just been limited to the attorneys. We have kept the staff apprised, they know what's going on. I have found that the reaction, for example, when law firms reduced compensation. It was one of the toughest decisions a law firm has to make in this kind of a situation, but the reality was the majority of the staff either wrote to myself or to my managing partner and thanked us for keeping their jobs and not letting them go or furloughing them because that's what was happening with a lot of other firms. So we were in a position where our staff was really relying on us to try to take care of the firm and everybody is part of the firm. 

Again, this is more of an HR scenario, as opposed to an empirical one, but I do believe that that fostered confidence, loyalty, and trust. In my firm, it worked. I can't speak to how other firms would talk to that, but we have over 400 employees in my firm, with over 200 attorneys, and in five offices, and we've been able to stay connected. We have everybody's doing meetings and communicating either with clients or internally through Zoom or conference calls. Some of them are doing depositions by zoom, partners are doing partner meetings, executive committee meetings, whatever you want to call it, they're meeting on a regular basis. So there's constant communication, we're meeting with the staff, and our HR folks are meeting with staff on a regular basis through conference calls and Zoom and any other technology resource available. I have found that it's all been very positive to the spirit, the human spirit if you will. The resilience of everyone, to work through this difficult time, and it's worked out very well for us. I think the productivity, we've seen the productivity, we see what's happening with the lawyers, we see the paralegals, everybody's busy and those who aren't, we're working together to find work for these people. So I mean, that's my firm story but I just think that change is a funny animal and I think that when people are put to the test, I do believe that the human spirit or the resilience of people, I don't think it should ever be underestimated, because I think people really will rise to the occasion. And I do believe in my case, that was the scenario.

Aurelia Spivey 
That's really good to hear. Thank you for sharing that. I think the human angle in all of this is, the empathy piece is certainly coming to the fore. We talked a little bit earlier about how you think that this is going to change the way firms and their clients do business going forward, in this virtual environment. What do you think are going to be the big changes that we're gonna see as we continue to work through working virtually through the crises? 

Frederick Esposito  
Well, I think from the firm's perspective, I think it is going to change the firm's culture. I think when you're used to being in the office and seeing people on a regular basis and sharing your lives or talking about different things, I think that is going to change. I think it is going to become more, and I hate to say this, but even so, this is a temporary situation, I do believe that on many levels, the remote or the virtual office experience is going to prevail, in many respects. I think firms that are going to have leases coming up for renewal, are going to think long and hard before renewing those leases because of this new normal. They have demonstrated, and I think everybody can say, that they have found that they have done this and they've made it work. They're thinking to themselves, why do I need all this space? Are we ever going to have all the staff back in the office again? We don't know that. Are all the lawyers gonna come back? Are some of them going to work from home on a regular basis and just come into docking stations? I think if anything, firms now that have leases coming up for renewal are going to seriously rethink whether they're going to stay in their existing spaces because if this is working for them. 

It also depends on their client makeup too and the types of work they're working in. If you're a corporate boutique, it may be tough going from an economic standpoint, depending on when the transactional side of things will pick up. But in other practice groups, where you are dealing with institutional clients, I think from the client's perspective, as long as they can reach their attorneys and they can get timely response and timely delivery of work product, I think it can be a real win-win. I also think that it creates more of a model of efficiency because now you don't have the overhead costs so much attached to the production of that legal work. The beauty of that is, you can price out work a little differently because you're not carrying the cost may be that you had in the past. So it's going to change that landscape as well, but I think it's really going to be contingent on the type of client, whether it's institutional or if it's a small client. 

I think the other concern is some of the smaller businesses and things are going to be seriously impacted by what's happening today. Hopefully, they will be able to weather it and they'll pull through, but I think the larger institutional clients, I think, are going to follow suit as the law firms. I think they're also going to start evaluating their business models and how they're working and what works for their firms and what doesn't, to maintain a level of profitability. 

I think it's a work in process. I think everybody is going to an evolution now, I think we're gonna evolve as well to see how long we can maintain this momentum and whether we can make money doing it. I think that's going to be the real litmus test for firms. But I can tell you, I think that people, the longer this goes on lawyers and paraprofessionals, they're going to get used to working from home. If they find they can be just as productive from home, then law firms are going to be in a position where they're going to be reevaluating whether they need the amount of real estate they have, in order to provide those services. In summary, you do that you eliminate a lot of your occupational costs. It has a definite impact on how you can price your work. That is something I don't know how many people have talked about yet, but from my way of thinking, I think that's where it's going to go. Because it is going to create a more receptive, I think receptive, environment and platform for really taking alternative fee arrangements to a whole different level. I just really think it is because you're working remotely. It's a whole different economic scale. So will that be positive or negative? It's too soon to tell, but at this juncture, I can tell you, I think that it has proven that there is opportunity out there, and opportunity for some positive change. But I still believe, as I did in 2008, it is still a revenue game.

Aurelia Spivey 
I want to expand a little bit more on the pricing piece there. Combining that with the process improvement piece, because that's a huge part in making any fee arrangement work. So, how do you think what's happening now, you talked a bit about the real estate piece, but are there any other elements of how it's gonna make pricing and delivery, more successful going forward?

Frederick Esposito  
Well, I think project management is really just managing the processes themselves. I think that under this remote, or virtual law firm scenario, the ability to identify problems, where you have bottlenecks or issues with efficiency, working remotely, is going to create opportunities for improved efficiency. You're going to identify areas that could be improved and you will find that all of those improvements are going to help get the work out faster because you are relying more on technology than you have before. You're not dealing with paper as much anymore, everything's going to be electronic. The other thing too is that people are not going to be taking up as much space in their offices anymore, they may give up space, thus reducing their own overhead and their own costs to operate. In doing so, it's going to create a more flexible platform for law firms to generate more profitable revenue. For example, if you're not spending money on different things throughout your office, and depending on the size of your office, as I alluded to in the beginning, office supplies or other expenses. Let's say for example you're not spending as much on advertising or tickets and tables because you're not going to events and you're not doing things as much as you used to because everybody's social distancing. When you look at a law firm's marketing budget, for example, they're spending up to an average of 2% to 5% or more of their revenues on marketing expenses. Well, a lot of those expenses, I think, are going to go away because you're not going to be sponsoring events because people aren't going to events, at least for the time being. So there's a lot of money going back into the firm's pockets on the expense side. 

So it promotes more flexibility to increase profit, but maybe even to streamline how you approach your pricing, and what you can do for the client. If you can do something that benefits the client, then you create an atmosphere of generating more work and more referrals for more work. So you're basically just running where you're getting most of your revenues, and a lot of them are now falling to the bottom line. Now, do I think that's going to play out in the long term future? Maybe? Could it be for just the short term, maybe too? But at least for this time being, I think law firms are going to see a lot of their expenses decrease, especially their operational costs and I think that they're going to find that if they can sustain the work and they can get out there. I still think that business development is going to be imperative here. I think you have to identify the niche areas that you can identify as a result of what's happened here, that will benefit your clients, and then market those, and get your clients involved in those types of cases. I think that there's definitely a plus side to this. 

But I don't think that the business development component is going to go away. It's just not. I think that the landscape is going to be better, because you're going to identify these areas that you can improve, and you can improve them rather quickly. When you're working remotely, one of the things I have found is that what might have taken you two weeks to fix when you're in the office, you fix within a matter of days, because it's a whole different work environment. You don't have as many of the bottlenecks, you can really resolve most of the issues through technology rather quickly and you can make things flow and move a lot faster. An example just as an internal policy change, one of the things I did when this happened, in order to capture more billable time is, I amended our time entry policy and required that all time be entered within 24 hours. Now, they used to have till the end of the week to make sure all their time was in and the total up at the end of each week. But I thought to myself, they're all working from home, so why not enter your time and get it in within the next day? The good news from doing that is I've already closed the month of April, and pre-bills have already gone out. So the attorneys already have their bill for April time. And they went out over the weekend.

Aurelia Spivey 
That is a great habit to get into.

Frederick Esposito  
It is and it forced it because the pandemic basically created a climate that fostered that change. I knew with people working from home, they had more flexibility to enter their time. They weren't having demands on their time to sit down and actually enter it. So I said to myself, and I said to the managing partner, I said you know what I'm gonna do I'm doing this, do you have a problem with it? He said, No, I said, I made it happen. The beauty of it is, I had very little resistance. Now if we had been in the office, and I said that that would have been a different problem. The reality here is though, it boosted the accruals because I think we capture time that we normally wouldn't have captured. Because folks were entering time more contemporaneously and it created better revenue opportunities for the firm. I found last month, based on the billing numbers, the billing numbers far exceeded the year before, at the same time and the realization was always a concern because, under the remote access situation, the concern is are people just entering time for the sake of entering time. The reality is the realization was well above what it would normally be. So we built all of that time. So it was real-time, which will come out to be real dollars. That was a simple, innovative step to change a process within the firm. We also tightened the billing schedule. All bills had to be returned by a certain date and all the billing had to be out by a certain date, to keep the cash flow up. 

So just by tweaking two processes, simple quick fixes and at a time when we knew that the atmosphere was conducive for people to take the time to get it done. At this point, I see it as when we hit the latter part of this pandemic where work may slow down a little bit, to some extent, we're going to have enough in the pipeline to generate enough cash flow later this year before things start picking up again. So those are just examples of some of the simple things you can tweak in the processes in your firm. And then to manage them to make sure that they adhere to, which is what we've been doing. We're following up with people so that we get everybody on the same page. I can tell you that after the first week, I have not had to chase anyone, nor anyone else under my supervision or in management had to chase anyone for time or billing because everything was out. So those are positive changes that have come out of this.

Aurelia Spivey 
What do you think clients are going to be expecting from firms as we move through this pandemic?

Frederick Esposito  
I do believe that attorneys are going to be, and legal services are not going to diminish. If anything, I think that a lot of businesses are going to be seeking legal advice, depending on the nature of their business and their work, with respect to providing solid business advice in terms of how their businesses and how their cases should be handled. I think it's going to vary from client to client, but I think that attorneys are now going to be looked at, more so than ever, as business partners, because it's they're going to rely more on their attorneys for assistance. For example, when one of our clients approached us about COVID, and said, Well, how is this going to impact us? What can we do, we're going to have all these claims and this and that. We created a niche of work to be responsive to our client's needs and we devoted the resources to it. It also created work for people who would be slowing down because of what's happening right now, because each practice area is going to fluctuate based on the needs in the pandemic. So we've created these opportunities for people, but I do believe that at the end of the day, clients are going to rely more on their attorneys. 

Now, will there be issues with fees and maybe payment? Yes, I do believe so. I think that this is a good environment now to start talking about fixed fees or flat fees or some sort of portfolio pricing. Especially if you're dealing with a client, who has multiple types of matters within your firm, in different practice areas in your firm. Because I think now is the time, when you want to create an atmosphere where the client is going to pick up even more value. I think that's critical at this juncture. If you're going to create the processes and tweak the processes, to the point where they promote more efficiency and potential for more revenue, I think now you have to come up with pricing strategies that clients can work with. Some of your clients are going to have difficulty with cash flow. So you want to work out something that now benefits the firm. I do believe that the firm while its operational costs may decrease, it's going to give us some cushion in terms of what we can do in today's market, to assist clients, at least for the time being over the rough spots, and to promote clients to pay. Or we might do more bet the shop type of arrangements with clients, where we absorb more of the risk. I think that's on a client-by-client basis, depending on the nature of the work, but I do believe that lawyers are going to be relied upon more. I think it's an opportunity for law firms now to really brush up on their alternative fee arrangements because I think clients are going to appreciate that, especially with cash flow being a concern with clients as this pandemic continues.

Aurelia Spivey 
We usually wrap up with the question, why does pricing matter to you? So I think the way I'm going to wrap this up is, Fred, why do you think pricing matters even more, now in the situation that we're in? 

Frederick Esposito  
I think it all comes down to economies of scale. I think that while some firms enjoyed working with pricing strategies and mechanisms in their firms, up to this point, and have done it successfully, I think we'll continue to move on that track. I think law firms now, because of the economics, because of the panic buttons being pushed by a lot of clients and law firms to reduce costs. I think more so than ever it creates a climate now, to really take a hard look, especially now that you're working remotely, take a very hard look at how you're producing your work and the value proposition of that work. The likelihood that you'll ever be meeting with your clients face to face is going to be very rare now other than through electronic Zoom or something of that nature. So I think it's an opportunity to build the relationships, to become very client-focused, and to really listen to the voice of the client to understand exactly what their needs are and to work with them on the economics to make the legal services affordable. It's also an opportunity for the firm to price the work so that they're generating some profit in all of this. To also look at the processes involved in producing the legal work. Is the answer automation? Is the key to success pushing the work down to a paralegal? All of these things work, in my view, as an equilibrium, because you're talking about efficiency, you're talking about value, and you're talking about focus. I think all of those pieces have to be looked at together in order to really strengthen the client's relationship. 

But I think the economics are going to drive it and I think that's why pricing has become very important. I think it's going to be very important going forward, because while the pandemic piece may resolve itself. The issue at hand is what's going to happen afterward. What is going to be the end result when the pandemic slows down? What is going to be the impact on relationships between law firms and clients post-pandemic? Will they will they survive? Will these businesses and these clients, will they make it through to the other side successfully? I think a lot of them are going to rely on their law firms and their other professional service firms to help nurse them through those rough times and to get them to a better place. So it's definitely something that I see is going to play out, but I think that any law firm that can partner with their clients and really address those three points, is going to make a difference, it's gonna make a big difference. 

You talk about the human aspect. I know this is business and I'm a business person, however, I do believe because of what's happened here it brings people together, with a common goal. I think that if law firms can exhibit to their clients that they listen, they understand the issue, and we want to work with you. We're in this together, as they say, I'm not up for catchy phrases, but we're in it together. I think that that has to be projected to the clients as well, to let them know that we're going to work with them. But at the same time, we all have to try and everybody's trying to make money in the process. So there's a fine line here, but I do believe there is an opportunity for the improvement, the process improvement component, that is critical. I think that by just making little tweaks and how we work with our clients, even if it's remotely from here on in, I think can benefit the firm but also benefit the client. I also think it also heightens the client relationship experience and promotes a climate, that when the business model gets better through the course of time and we have a better handle on the economics that's going on in this country and around and for our clients, it's going to put us in a position that's going to differentiate us, it's going to continue to differentiate us in what we provide to our clients. So right now, it's a process, not only of economics but also of maintaining client relations and to build on those as well. I think with that and those tools, I think it will foster an even stronger relationship with a client down the road.

Aurelia Spivey 
Thank you, I think that's a great spot to end. 

Fred thank you so much for your time today and for sharing your thoughts with our listeners. I think they're going to get a lot of value from hearing from you.

Frederick Esposito  
Well, all I can say at the end of this is that it's one of these situations where it's going to play out. We're still in its infancy and this is the way it looks right now, but the landscape will always continue to change. So it'll be interesting to see where we are in six months and that I think would be the real ticket.

Aurelia Spivey 
Thank you for listening to Pricing Matters, a podcast Digitory Legal. To find out more about our guests please visit our podcast page. If you have any feedback or guests that you think we should feature, please reach out to me. Thank you for listening, see you next time.