How PERSUIT auction pricing movement affects win rates
I’m back from my second-favorite conference, LVNx. The JAM team (Jordan, Alex, Molly) covered a lot of ground, and I wanted to share a few highlights from the week, including some of the data we presented on how auction pricing movement on PERSUIT impacts win rates. If you do nothing else today, make sure to check out that data below.
Before we hop in, we just launched our law firm community. This is a platform to connect with peers, share best practices, ask us questions directly, begrudge openly about auctions, anything you want. This space is for you.
It's firms-only today, but will expand to clients in the future. You can join here. It only takes a few seconds.
LVNx Recap
LVNx is the Legal Value Network’s annual conference for legal pricing professionals. It’s a wonderful conference filled with wonderful people. Truly.
The JAM Team was out in full force.
Like every conference these days it was all AI, all day. And while I am saturated by all the GenAI talk, what I did find satisfying is that law firm pricing teams finally seem to be facing the reality that they need to price their work differently…
Yes, many of you have been talking about it. But now we’re seeing concrete examples of it happening.
I’ve been yelling from rooftops (aka LinkedIn) all year that how firms price legal services has to change. Some tasks that used to take 30 hours may now take 30 minutes. And you can’t keep pricing those the same way, not if you want to maintain revenues and profitability. Your clients want to understand how your price reflects the value of the work, not the hours it took you last time.
The Presentation (That Turned into a Town Hall): How Auction Pricing Movement Affects Win Rates
During the conference, I agreed to get on stage with Julio Sanchez (Senior Manager, Pricing at Perkins Coie) and let him fire any and all questions at me about all things PERSUIT.
Questions like: Do reverse auctions actually work? What do clients really care about? Just the lowest price? And more.
We had a lot of crowd participation as well, especially when we pulled back the curtain on auction data.
There were three main takeaways:
1. What happens if you come in 1st place right off the bat — before the auction even begins?
If you nail this, your odds of winning are 44%. Full stop.
And yes, we know. You’re flying blind at that point. You don’t know how your peers are pricing. You may not know where the “market” is.
(If only there was a Price Benchmarking product to understand the market before you submit a bid…) 🧐
The point stands: if your initial price is tight, and one your firm can stand behind, you’ve signaled readiness. You don’t need to move a dollar and you’ve given yourself a great head start.
2. Cool, Jordan, but what if we’re not first? What if we’re in 4th place to start?
Say you submit a bid and are the 4th highest priced firm... What’s the impact of adjusting your price to shift your position? Here’s what the data says:
Stay in 4th:
- Your odds of winning are 12%
Or adjust your price to end up in…
- 3rd: Your odds nearly double to 21%
- 2nd: Your odds jump to 27%
- 1st: You more than triple your odds of winning, now at 42%
This is… probably not surprising, but when you can put actual numbers to these behaviors, it can be more actionable.
And if you’re sitting there saying “well doesn’t this just confirm it’s a race to the bottom?”.
I have one more to share before I respond to that.
3. What if I’m usually starting somewhere in the middle, like 3rd place?
Say you submit a bid and land in 3rd place (i.e. 3rd highest priced firm). Here’s what the data says:
- Stay in 3rd: Your odds of winning are 18%
- Move to 2nd: Your odds jump to 30%
- Move to 1st: Your odds go to 39%
So again, you might be saying this is just a race to the bottom.
Look at the numbers.
If the lowest bid always won, 1st place would have a 100% win rate. But it’s not even close!
In fact, even if the lowest bid won most of the time, you would expect it to be closer to like 70%, right?
Across all matters on PERSUIT, the lowest priced firm wins less than half the time (46%). And in these aforementioned scenarios, two things can be true:
- You can meaningfully improve your odds of winning if you’re willing to move. You don’t have to slash. You don’t have to be the cheapest. But if you’re misaligned at the start, adjustments can have a big impact.
- Reducing your price often isn’t enough. Even going from 4th-to-1st or 3rd-to-1st, you still only have a 42% or 39% chance of winning, respectively. Firms are absolutely being judged on more than just price (i.e. their strategy, team, expertise).
So no, it’s not a race to the bottom. And I take issue with that phrase too: “race to the bottom”. What bottom are we talking about? Is it the ‘bottom’ where your firm’s margin goes from 40% to 30%? When you have clients with razor thin margins like 2%, 3%, or 4%, you may want to be more careful using that phrase.
Ok, that’s my soap-box bit done.
Back to auctions. To be clear – you never have to move. That’s entirely up to you. But now you know the potential impact if you do.
PERSUIT for Firms is a monthly newsletter dedicated to law firm growth, written by Jordan Weinstein, VP of Data & Growth at PERSUIT. Click here to subscribe.
