Aderant today (28 October) announced the acquisition of SaaS legal pricing solution Virtual Pricing Director (VPD), which leverages AI and adaptive workflows to help law firms accurately price their matters and shape their pricing strategy.
Founded in 2017 through the collaboration of UK costs consultancy Burcher Jennings and legal pricing consultancy Validatum, VPD is widely recognized as a leading global authority on law firm pricing. The company, co-founded and led by Richard Burcher, continues to specialise not just in software but in consultancy, which is regarded as an important part of its ongoing offering.
Law firms today face unprecedented pressure to deliver fee transparency and increasingly, alternative fee arrangements, which can be tricky without a good understanding of how the firm has priced work in the past and what money it has made on its matters. Aderant says that with VPD now part of its portfolio, firms will eventually have an entirely integrated offering that builds pricing, finance and billing into one offering.
VPD remains vendor agnostic and will continue to support law firms that use the likes of Elite 3E. It remains to be seen how those customers will feel being part of Aderant, although Aderant’s entire product suite, including its recent acquisition Hercules AI, is vendor agnostic.
Speaking to Legal IT Insider about the acquisition, Aderant’s CEO and president, Chris Cartrett, said that the Atlanta-headquartered company was moving towards building its own pricing solution when they came across VPD.
“When you look at leading law firms around the world, pricing is becoming hands down one of the greatest challenges,” Cartrett said. “There’s everything from the standard way you would price a matter to now having certain elements of that that are fixed fee. You’re having all these alternative arrangements and you now have AI included in this. And so pricing keeps bubbling up as this core challenge that everybody’s been facing.
“We did a full evaluation of everything that was in the market and there’s just not a lot. And what does exist is very dated. We set out to build something because with AI you have this incredible opportunity to truly generate matter plans and pricing guidelines for firms or lawyers that they would want to take to their clients.
“One of the people on our team, Josiah Chaves, said, ‘Hey Chris, before we start this build, there’s this product out there you need to see. And it was Richard’s product. When we got a view of VPD, we realised immediately that they had built this thing the way we were about to start building. And so from there it became a no-brainer, and we could not be happier to have Richard and literally his whole team coming over.”
Aderant is keen for Burcher to continue his pricing consultancy and seminars, and Cartrett said: “One of our goals was not just the software piece, but to also really continue to support and augment the consulting part of Richard’s business. Law firms look to Richard to come in to help be the pricing guru with guidance and advice. And then the software is a way of continuing that into the business or into the firm.”
VPD is headquartered in the UK but has US clients and Cartrett says that the product is ‘ready roll on day one.’
The acquisition will mean that Aderant will be competing on pricing with close partners such as BigHand. Cartrett said: “There’s always things that we compete with several partners, whatever it may be. The reality is the majority of their business is not in that world.” He added: “We’ve had a matter budgeting tool for years called MatterWorks that still has about 40 different large law firms around the world running that. What VPD has done is build a greatly enhanced AI generating pricing tool and there’s nothing in the market that does this.” Matter Works is an on-premises solution.
Pricing is a tough nut to crack and speaking to Legal IT Insider, Burcher said: “There are a number of important differentiators with what we have done. The first one is that people think that pricing is a mathematical exercise alone. It isn’t. And so when you come at it from the preconception that it’s an arithmetical exercise that drives a whole lot of other decisions from where it sits as a function within the firm and limits the people who are capable of having any useful input into it.”
He added: “The great advantage of the Aderant base is that there is an absolute mountain of data in there. We all know that firms are drowning in data. That’s not the challenge. The challenge is how to extract it in an actionable way, particularly at partner level. Try putting a Power BI dashboard in front of a partner and think they’ll engage with it happily, they’ll run for the hills. So the trick, the trick with what we’ve done with VPD, is to make it extraordinarily powerful, but make it look like any numpty can use it. And I’m not suggesting partners and numpties, but the fear factor has to be removed. We want them looking at it and going, ‘gee, that’s pretty obvious. You click that, you click that. You select that from that dropdown. And I have a really cool pricing proposal.’ I love so many of Steve Jobs quotes, and one of them that really resonated with me was, ‘I’m as proud of what we left out of our technology as what we put into it.’”
Burcher says that VPD already incorporates GenAI technology, observing: “I know that Aderant has considerable depth of capability there, so I look forward to learning more about what we might do with it.” One obvious area of development would be for lawyers to converse with VPD in natural language, and Burcher said: “That’s exactly where I would like to take this, so the partner can say, ‘I’ve just had instructions on this, how might I best resource it?'”
This is the latest acquisition in a series of acquisitions by Aderant of back-office operations solutions and Cartrett said: “When we have these strategic opportunities to hire and to bring talent inside the business, it is the best of both worlds: you’re getting really good products and applications and you’re also bringing in talented people.
“We are of the mindset that the winners five years from now are the people who are spending the money right now as it relates to AI, because it is honestly having an enormous impact, especially in back-office operations, which is Aderant’s sweet spot. This will be a continuous journey for us as we keep moving forward and we’re going to remain very acquisitive.”
