Podcast Transcript:
Dwight Floyd
I do think it's the intangibles and going back to that relationship piece that makes it feel successful to both sides.
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. Our guest this morning is Dwight Floyd. Dwight is the Chief Operating Officer at Eversheds Sutherland. Good morning, welcome to the podcast, Dwight.
Dwight Floyd
Good morning.
Aurelia Spivey
I would like to start with your journey. So tell us a little bit about your background and how you came to your role at Eversheds and the pricing world.
Dwight Floyd
Sure, happy to, and it has been a little bit winding over the years. So I actually started out my career far, far from legal I was a biologist, actually went to grad school out in Colorado for biology, and I was studying all sorts of interesting things, including the ecology and evolution of parasites. I was a biologist working in the field, working in the lab, really enjoying that thing I was going to do teaching and research. And somewhere along that path, I got anxious and wanted to do something different, wanted to see some different sorts of problems, and started looking back at the things I had left behind from college, including potentially going to law school. I went through that process trying to figure out if that was the right thing for me. I ended up in law school in Virginia, went straight into practice in Atlanta, as a litigator in a firm down here, that is now part of Dentons, and did that for a number of years. I moved back home to South Carolina, still as a litigator, trying cases, doing the whole bit, and was a partner in my firm there. Then I got that little itch again like I had when I was back in grad school, that I might want to do something a little bit different. And so timing and opportunities came together at just the right time for me to actually switch away from practice and go into a new role for my firm, at that time about 200 attorney firms. I went into a role there that was a little bit like what I do now, it covered a lot of different areas, including pricing, profitability, LPM, and knowledge management, and pulling all those pieces together, trying to work with the firm on that, and so that got me into this part of the world. I have been at another firm since then, before I came to Eversheds Sutherland about two and a half years ago, in this pricing value role that was perfectly suited to me and also was the perfect excuse to get me back to Atlanta.
Aurelia Spivey
Well, I can certainly relate to a lot of those career pivots. I don't know if it's your feed or just wants a new focus and challenge. So I've done a few pivots myself.
Dwight Floyd
Restless soles.
Aurelia Spivey
Yeah, and it's always fun to learn new things, so I think that's also what drives us. So you and I got introduced through my friends at the True Value Partnering Institute. They were on the show in episode 10, actually talking about their conference, which now seems like a million years ago, that we were able to all meet in person. And I wanted to talk to you a little bit about the accredited legal pricing professional (ALPP) accreditation and just to understand from you, what made you pursue that at that time and how has that sort of influenced your approach to pricing.
Dwight Floyd
I had already been involved in TVPI and that group for a number of years, great group of folks doing everything they can to advance the profession and make it known. Sometimes while I was participating with them the Accreditation Program was started, including the ALPP, to bring some rigor and some standardization to the profession and recognize that we all come from very different backgrounds, wide, wide, different types of backgrounds. But the accreditation brings it home to note that we have a common basis of understanding at a fairly high level, and the accreditation is built around a number of different things. Which I think qualified for, I was in that first group of accredited professionals, and I think I qualified or came close to qualifying right out of the gate. So it has to do with whether you're working in the profession, whether you're at a manager level or higher, you get points for each of these things, or whether you're a director or a chief, and then there's that you've been at the profession for a while. Then there's a great deal around education, and kind of commonality of a background of education, whether it's certain types of seminars are master classes, Colin Jasper and Stuart Dodds do a legal pricing masterclass, that's kind of the bellwether for what a lot of us do. That's a multi-day, two-day, maybe three-day course, that has a wealth of information in it. So that's a big piece of the accreditation. Kevin Doolan has been really involved in the institute and he has pricing negotiation training that he does as well, as he does at our TVPI meetings. There are other academies and other coursework and Richard Bircher, in London, does a validate on pricing education. And of course, there are professional meetings, whether it's P3 or ILTA, or Buying Legal or Law Vision, and has a pricing roundtable, all those things can be part of our educational experience, because they all kind of build on one another. All of those things go together to make sure that we again have this common body of knowledge that we all implement in our particular ways, that our particular firms based on our culture and particular needs. But that along with the continuing education component of it, I think has done a lot to enrich the profession.
Aurelia Spivey
Fantastic, thank you for sharing that. So there's, from what I'm hearing a few different ways that you can approach getting the accreditation, but there's a common body of knowledge and a common set of seminars and education that you're able to attend and sort of build towards that accreditation.
Dwight Floyd
So all that education that's behind that has certainly helped for my views of how to go about pricing, how to approach my partners and my firm, and our clients, to make the most of our relationships. TVPI itself and the group and the ability to share ideas, and the fellowship and support among those pricing professionals, that adds a whole other layer, a whole other multiplier, on top of this individual knowledge that we all hold. So it's one thing for us to all have this common background, and be able to apply it in our own ways, we're all intelligent enough that we can do that kind of in a vacuum if we had to, but because we've come together around not just the accreditation, but around TVPI, that gives us the ability to bounce ideas off of one another, it gives us the ability to support one another. We're talking about theory and common problems and changing and improving the legal industry as a whole and the things that we can do to be a part of that. So that part of it is where I really get the benefit. Letters after the name are nice and it's a good recognition, and I'm proud to have that, but what's even better is to have that group of people that we can work together to make things better.
Aurelia Spivey
When I was doing my research for the podcast, I was obviously looking at your LinkedIn profile, and it's a really great profile. And you really pose some very compelling hypothetical questions. You know, what if there was no hint of antagonism between the client and law firm, and no fear from either pricing requests and billing, amongst others. So I definitely encourage people to take a look. I'd love to know what inspired your quest to change the legal industry as it is today.
Dwight Floyd
I've always been sort of an issue spotter. I've always been I call it nitpicky, that's what I put in the profile because that's what my dad used to always say about me, that I was being nitpicky. But I was always seeing these little things, it didn't matter what I was experiencing or doing or seeing, I would see these little things that could be improved or fixed that didn't necessarily take away from the enjoyment of what I was doing, but I can always see these little things. And it's probably why I got into legal to begin with because it's a lot about issue spotting seeing these things. You do that as an attorney, you do it in litigation, and transactional practice, but you can also do it now in this current role, where you see these different things, these processes, the way things are interconnected, and you can immediately see the things that need to be fixed, the kind of things that we could do better. It always seems to me that if I see a problem and if somebody else sees basically the same problem or challenge, maybe as a better word, if we both acknowledged the challenge, and we both look at that challenge together, even if we see it from a different lens, we're gonna come to a better solution, working on it together than by hiding our cards or trying to play what the other person is going to do or anticipate what the other person is going to do. It's kind of this, well this goes back to biology too, it's the old prisoner's dilemma sort of game theory, you're better off if everybody has all the information. So that kind of drives that, that's probably just part of my nature, so that's what drives me to do those things. To not only improve it and fix things, but to do it together, rather than in some sort of adversarial way or gamesmanship way.
Aurelia Spivey
That makes a lot of sense and where there's a lot of talk about that type of collaboration. Particularly before the current COVID crisis, we were talking about it, but I think this has really elevated the need for greater collaborations between law firms and clients. So do you have any examples perhaps of how that has played out with the clients and the pricing arrangement,
Dwight Floyd
This may not be the kind of example you're talking about, but it's something we've been talking about with TVPI in particular recently, which is that the attorneys in our law firms have always acknowledged, even though we're doing work and we're sending bills and getting paid for solving problems for our clients, it's always been a relationship business. It has been in a relationship between the attorneys and the people that they know and the GCS office or somebody at the company, whatever, there's always this relationship. So there's some level of trust and knowledge about each other, somewhere within the system, and the more trust and knowledge there is between the client and the law firm or between the client representatives and the attorney, the easier that relationship is going to go, and the more you're going to be able to accomplish, the more you'll be able to collaborate. Well, the same is true in the pricing world as well. The more, it's still a relationship business, we're in contact with folks in the legal ops department or folks in procurement or whatever, the more we can have conversations, the more we can understand where we're both coming from, the more we can relay what we both want, or need, or where we can move or where we can't. The more those kinds of things can be shared, the better result you can get in the end. And so come back around to your example, that is increasingly, that's always happened between lawyers and GCS, that's increasingly happening between pricing folks and legal ops folks. TVPI has been very deliberate about trying to bring everybody into that circle together, you see that a little bit CLOC as well, where you got the legal ops people who are bringing in the law firms more and more, which tend to be, and when they're bringing folks in from the law firms, it tends to be the legal ops people at a law firm, that is the pricing, the LPM, the value folks. So I would say that's the best example we can see kind of in real life, and we've seen that in specific client relationships and in matters as well.
Aurelia Spivey
Fantastic. Yeah, I think the rise of legal operators has been a great part of the last sort of five to 10 years, and I think that collaboration is going to help us as we move through this current period. So I'm going to switch gears, as we like to say in the podcast world, and I wanted to talk a little bit about data. And I'd love to know from you how you're leveraging data to increase the precision around pricing.
Dwight Floyd
Well, it was my very first hire. When I came in the first person I hired was my data guru. The person who can go under the hood and pull out any piece of information that we want, or any collection of information that we want, and look at it from all different angles. And it has been, the contribution that he has made to what we have done is immeasurable, and we couldn't have done half of what we had done without him. Because it is, as people say, the new currency, it's the way that we're getting things done, the way we're able to leverage those things and to have. I think law firms as a whole have been pretty slow, really, to leverage what they have because we're sitting on a mountain of data, a mountain of it. It's unstructured, it's hard to decipher, it's hard to put into the categories that we want it to, but there's an incredible amount of information there, that we can just get to it and look at it the right way it's going to be huge. So, so yeah, he's done a tremendous job helping us out to get better insight into where we are, where we want to go in terms of the kind of projecting or modeling, whether it's a matter or a client, or portfolio, or risk, or what have you, or our internal metrics, but also being able to provide that information to our clients, because that's important, too. That's another part of that collaborative nature of what we're doing. If we understand each other, we trust each other, and we're able to give each other information that's important to the other, then again, we're going to come to better solutions.
Aurelia Spivey
On the data angle, I couldn't agree more. There is definitely a mountain of data and when you are able to decipher that data, it's it is gold to us. But saying that there are some challenges in the way that we've collected data as an industry. What do you see as some of the greatest challenges around that and how the industry is starting to overcome them?
Dwight Floyd
Well, the biggest one we continually talk about and it's true more and more as we build out our client experience function. Our client experiences are sort of components of traditional LPM with a larger kind of portfolio management and client-facing role with it as well. But as part of that conversation we've had, we continue to deal with time entries, things as basic as time entry and having a categorized correctly so that we know what we're doing and when, and how it fits with the budget and what the budget should look like, and maybe what the next budget should look like. So I think that time entry piece continues to be a huge challenge because even in the best of circumstances, when we're assigning tasks to things or even if we're manually reviewing all of the biggest projects, where you're manually reviewing mountains of time entries, it's still not great and it's certainly not very scalable. So I think that's kind of the holy grail right now.
Aurelia Spivey
What I'd love to ask now, Dwight, is what are, in your view, some of the elements of the most successful pricing arrangement that you've seen in your career?
Dwight Floyd
I think it's most successful when both the client and the law firm, feel like it's a success. If either one of them feels like they were taken advantage of or given more than they needed to or somehow didn't achieve, didn't meet the expectations of the other. I think those probably, by definition, are unsuccessful. And the fact of the matter is, those types of things happen all the time, that the client or law firm or both walk away from a matter. Even if the matter was a quote-unquote winner in terms of closing the way it was supposed to at the right price, or the summary judgment was one or the name your success metric. But maybe one or both of the parties, who were involved, didn't feel as good as they might have otherwise. So that's probably the threshold issue, and that goes back to the trust and the relationship and all that. But the part of it during the course of the matter, and I think the way you keep those good feelings as good as they can possibly be, is to communicate. If you're trusting each other, and then you're communicating throughout the course of that relationship. Now I feel like I'm getting marriage advice or something but that's really what it is. It's making sure that you're not assuming what the other person is thinking. That you're trying to reflect back and say this is what's going on, this is what I'm experiencing, what do you need, what are your expectations here? What do, and to clients making all of the calls on these things anyway, so give them that opportunity, empower them to do those sorts of things. And the more they're able to do that, the better they're going to feel about how everything's being handled, even if the end result may be exactly the same thing. So I think it's really those intangibles that make it a successful arrangement. Yes, the finances matter, they matter to both sides, the client doesn't want to spend any more money than they have to spend or what they think is valuable spend and the law firm obviously doesn't want to lose money on the venture, because that's business on both sides. But I do think it's the intangibles and going back to that relationship piece that makes it feel successful to both sides.
Aurelia Spivey
I couldn't agree more. It does make me wonder because we see very often a hesitation to communicate. How do you work with attorneys who are hesitant to communicate during a matter, or particularly when it comes to where the price is changing or you're starting to see in the bills that things are getting ahead of themselves? Have you had to coach lawyers on having those conversations before?
Dwight Floyd
Sure. I mean, those sorts of things come up all the time. We always encourage, and there are some rules of thumb, I suppose, one of which is to communicate about scope changes the instant you see them, not to go to the client and say, there's a scope change, this is going to cost more, or there's a scope change, we need to change the terms or something like that. But it is to communicate, look, this is what's going on and I understand what's happening in your matter, we need to inform you of what is going on, we don't think it's going to affect XY&Z down the road, but it could. And I think, and I'm saying this as an attorney, not as a representative of my firm or anything, but I think as attorneys we have a real fear of being wrong and we have a real fear of projecting too much uncertainty about the future, because we think it makes us look, well maybe like we don't know what we're doing. But I do think that the more we communicate about that, and the more that we can reassure the client, in the context of the uncertainty, I think the better off we're going to be because again, it goes to that relationship piece. I'm always preaching to my team about this, there is nothing that creates stress and angst more than not knowing something. And then to quote the first partner I've ever worked with, years ago in Atlanta, a problem once you identify it, is never going to get better by ignoring it. So once you see it, let's bring it to the forefront, figure out how we're going to deal with it and how we're going to communicate with it, communicate about it, and then it's either going to a be a problem down the road or it's not, but at least we've put it into its slot, and we know how we're going to deal with that down the road.
Aurelia Spivey
Absolutely, and I think it is common in any of us who were former lawyers, or current lawyers, it's that perfection and that feeling that you have to know, to be able to work with clients and for them to be able to trust you. But I love the way that you use the phrase reassuring the client because I think that is what makes those relationships stronger and down the line, once you've got over that fear of make having that communication, you will always be glad that you did have it and your clients will trust you more, at the end of the day. So moving on to something that is different to relationships, I would love to talk a little bit about technology and process management. I think that you alluded a little bit to that in talking about the client experience team, but how does technology and process management play a role in making your team successful?
Dwight Floyd
In terms of process management, we are very much, I would not say that we're regimented by any stretch of the imagination, but I think the folks on the team are process-oriented. Because we have this, as I said at the very beginning, this desire for constant improvement and to see things that can be made better or to be more efficient, that we are in this constant improvement mode and we are trying to make these processes better. So I think that guides our thinking generally. Then you can leverage technology to help in that regard, in all sorts of different ways. But I think the biggest thing for us with respect to technology is to find ways that it can help the attorneys in their service delivery process, to get them the information they need, when they need it, in a way that doesn't disrupt their usual mode too terribly much. You don't want to make it too heavy a lift for them, for us to help them. We can't rightly go to them and say, the only way I can help you is if you completely up in the way you've been doing things for the last 25 years since you've been incredibly successful at. So I think that's a big place where technology can help us if we can deliver information, whether it's alerts or budget monitoring, or to show them data in different ways. So data visualizations, whether it's their own revenue, whether it's the performance of the matter or portfolio of matters, those sorts of things, I think that has been the biggest way we've been able to leverage some technology here. I think that helps with communication to the client as well, if we can package information in a way that is easily accessible and visible to the client, that's another place that technology can really help. And that's separate in apart from the way that technology can help aggregate, analyze, slice and dice, the data to begin with.
Aurelia Spivey
Absolutely and what I want to talk a little bit more about again is the team and skills. Because being a biologist, you'll relate to this question, pricing professionals come from such a variety of backgrounds. So I'd love to know, though what are the most important skills that people need to be successful in the pricing role?
Dwight Floyd
I think it can vary, I don't think there's a one size fits all, perfect example of a pricing professional. I think as you have alluded to, we all got here, along sometimes very different paths, but we've gotten to a very similar spot. Our paths, however, inform how we operate within the systems where we really work, to extend the biological metaphor, the law firms that we're working with them, they all have their own ecosystems that function a little differently. Some things work and some of them some work and others we tend to call that the culture, I guess, within different firms, that's usually how they refer to themselves as their culture. But the different pricing strategies probably work differently in different cultures and in different ecosystems. If there's one universal piece that I could put my finger on, however, is that those within this, I think this is true for most of us at TVPI, that we are, we tend to be generalists, in that we're interested in a lot of different things and we're interested in understanding how all of these things fit together and we communicate across these different areas. So maybe generalist isn't the right word, but we're boundary spanners. We will call it silo wall breakers or whatever. I think we're driven, and similar to what I said at the beginning, although other people might not call it being nitpicky, but I think we all see what processes are failing because they're walled off from one another. And almost all of us are relentlessly trying to pull all those different pieces together and we do that through communication, most of us I think are at least halfway decent at doing that and trying to build those bridges between these different groups. What you find when you do that, is that most of those groups want to be freed of their silo and do realize that they may have been doing something that could be done a little bit more efficiently if it just took some time to recast. So anyways, to answer your question, lots of different paths, looking at things in lots of different ways, including people who are super financially oriented and have a complete financial background, some of whom have gone on to be CFOs, to a biologist, or a practicing attorney. So you can come at it from different ways, but we all have that common theme of trying to pull people together in different ways. Most of it is not our making decisions or being arbiters of anything, most of it is getting the right information to the right people so they can make the decisions, whether it's somebody in accounting or billing or whether it's our financial partners, or our executive partner, or the partners themselves, or even business development, or marketing, getting the information to them so they can make the right decisions.
Dwight Floyd
We can't have a conversation, at the moment, we are still very much in the middle of an economic pandemic. So I'd love to talk a little bit about, what I'm calling, what people are calling, and pricing in the next normal. I've also heard the phrase that with the new dynamic, there are so many ways to think about where we are right now. So I'd love to know, from your experience, what do you think clients are expecting from their firms as we move through this period in history?
Yeah, the new normal quote unquote, new normal got played out after 2008, so I guess we have to have a better name for what we're doing now. But 2008, and everything that happened in the Great Recession, greatly informed clients and law firms about how to deal with the current crisis. I don't think anybody expected this kind of crisis, at this level, at this time, and this soon after 2008, but I think it has, you can see it with the way clients and law firms have reacted to it, that there are a lot of lessons learned from 2008 that are all for the better. I say all for the better, mostly for the better. Frankly, legal ops, Pricing and Value, and LPM, those pieces have always kind of been around, only really began to thrive after 2008, or really proliferated after 2008. So I think you'll continue to see both of those functions relied upon in this new dynamic or whatever we're going to call it.
What I'm hearing from, this is more from observers than the clients specifically, although I see as I can't really speak to what our clients are doing right now, but what I'm hearing is that clients will be and companies generally are going to be increasingly concerned about certainty in their spend and how things are budgeted. We talked a lot about that since 2008, but it was, I think there was a lot of, it's probably an overstatement, but there was a lot of lip service on both sides of the equation about that certainty and about AFS and that sort of thing. Everybody kept waiting for those things to take off more than they really had. But we really are here and a lot now because of how quickly everything changed at the end of March, the beginning of April. How quickly everything changed, that the certainty of what everybody was going to be spending for the next phase, the next budget phase or whatever was going to be increasingly important. So we think we'll see more of that. So this client experience piece, the kind of traditional LPM roles, I think that's going to become more and more important. It's going to become more important for the pricing folks to get the price right on the front end. And then also, again with LPM and client experience to make sure we're able to perform to the price along so everybody is happy. I do think that's probably going to be the biggest trend. I would somewhat hopefully say that the constant back and forth about rates and discounts, I would hope would start to subside a little bit. I mean, everybody agrees that we need to have a baseline, but I think there's a lot of breath and energy and frustration spent by clients and firms over the concept of rates. It's a real challenge, it is a challenge every year, it's a challenge, good years and bad and nothing's going to make it go away unless we start doing things a little differently.
Aurelia Spivey
That's an interesting point of view and I was going to ask you as well, what do you think are the greatest challenges that pricing professionals are facing at the moment? And how are they overcoming them?
Dwight Floyd
The billable hour or that hourly rate is still, as inefficient as it is, kind of remains the easiest check on the whole system, from the client side, and on the law firm side. But it really does, it consumes an incredible amount of bandwidth in discussions. It interferes with that mutual collaboration about, what do you need. What can we provide? How can we get you value? How do you define value? How can we get it for you? It really gets in the way of that because it still distills everything down to an hour of input and the somewhat either market-based or arbitrary value that's been placed upon it.
Aurelia Spivey
I feel like this is a philosophical conversation that we could have for hours and I think my next question was a little bit of a crystal ball, and it sort of relates to this whole piece of our conversation. How do you think that the concept of value certainty is? You also talked about, how do you think it could evolve. What could start to break down that tension and that need to cling to the billable hour? Do you think?
Dwight Floyd
It still goes back to those relationships and trust and communication. There are examples out there of clients and firms who have teamed up, particularly in a very large scale or exclusive single provider type situations, where they seem to like the results, and both sides feel good about it. But there are also examples out there, and the survey shows it, that some of the clients who have spent a lot of effort and a lot of money on big panel multi-year, multi-year panels, that they're not pleased with the result. So I think the real answer for value is probably that it's almost always in the eye of the beholder. That you have to, there's no one definition for it, you have to ask your client what is valuable to them in this particular situation, and it's not true across the entire portfolio, it may be very different in this particular matter, in this particular time, then it might be for the same matter in a different time, or with a different stressor or not under the shadow of COVID, or name your variable. And I guess what I'm getting back to is the communication piece because the first thing you have to understand is what the client wants and needs and expects. Otherwise, you're never going to be able to provide value. I can't remember who said it, I'm terrible at attributing quotes, this is not mine, but I have it written down on a post-it note at my office, which I'm not sitting in at the moment because I'm working from home, that, have you asked your client lately what they expect? And if you haven't, what could you possibly be giving them? I mean, are you giving them what you think they expect? It's just these questions spin up. So again, value is in the eye of the beholder in the moment, so we just need to be asking and to be asking our clients whatever they want and then figure out a way to deliver it to them.
Aurelia Spivey
Thank you, I couldn't agree more. It is different as you say each client, each matter, but if you can then, at the end of the day, be able to repeat back to them and say, Well, this is what you wanted and this is what we did, and here's the information. It's going to just continue to deepen that relationship. So this has been a fantastic conversation, and I always end with this. Dwight, why does pricing matter to you?
Dwight Floyd
A very good question. It matters to me because it matters to the firm. It matters to our clients. And because of that, and because I'm in a position where I can contribute to the success of our clients, our external clients, as well as our partners, our internal clients, that makes it important to me. It lets me work with and solve problems in a way that, frankly, is was is less adversarial than what I did as a litigator. I love litigating, I love going to court, but if I can do the same sort of issue spotting and the same sort of, let's say, subtle advocacy, as a consultant, essentially to the partners in our firm, then that's a pretty good way to spend my days.
Aurelia Spivey
Fantastic. Thank you so much. That's a great answer and this has been a great conversation. Thank you for joining us today.
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.