How do I propose Volume Discounts in Rate Review Pro?

In PERSUIT’s Rate Review Pro, in-house customers have the ability to proactively request information from a firm regarding volume discount arrangements. 

In this article, you’ll learn how to:

• Navigate to the Volume Discount Commercial Arrangements section
  • Indicate if Volume Discounts will be Offered
• Build the Proposal Volume Discounts Commercial Arrangement Structure
  • Volume Discount Arrangement Details
  • Tiers
  • Exclusions from Tier Qualification
  • Exclusions from Discount Eligibility

Navigating to the Volume Discount Commercial Arrangements Section

In a Rate Review Pro proposal drafting screen, you’ll find the Commercial Arrangements section, if included in the request.

Indicating if Volume Discounts will be Offered

Even if the in-house customer has requested information about any volume discounts, you have the ability to indicate whether they will be offered or not as part of your proposal.

In this section, you’ll first see this question, “Will your firm offer volume discount?” From here, you can answer Yes or No by selecting the appropriate option. If you answer no, the volume discount form will disappear.

If you answer Yes, the form will remain for you to fill out as you see fit.

Building to the Volume Discount Commercial Arrangements Structure

• Volume Discount Arrangement Details
• Tiers
• Exclusions from Tier Qualification
• Exclusions from Discount Eligibility

Volume Discount Arrangement Details 

When an in-house team includes a Volume Discount Commercial Arrangements section in their request, they have the option to either 1) propose their own preferred term and scope details for volume discounts which firms can fully accept or amend, and 2) allow firms to freely propose the terms and scope details for volume discounts without proposing any terms.

The terms that are available to set include: Fee Scope, Recognition Timing, Measurement Period, Tier Application and Tier Type.

1. Fee Scope - choose between Net Fees, which automatically excludes taxes and disbursements from accruals, and Gross Fees, which counts all billed amounts toward thresholds unless excluded.
2. Recognition Timing - choose between Billed, where spend accrues on the invoice date regardless of when payment is received, and Paid, where spend accrues only once payment is received and recorded.
3. Measurement Period - choose between Rolling 12 Months, where spend is measured over the previous 12 months on a rolling basis, Calendar Year, where spend is measured within each calendar year, or Custom, where spend is measured within the defined custom period. 
4. Discount Type - choose between Threshold, which sets a discount rate at each spend threshold, Range, defines explicit from/to ranges for each discount tier, Rebate, which is a set dollar amount given as credit. 
5. Tier Application - choose between Incremental, where discounts apply only within each tier band, or Retroactive, where new rate applies to all spend once a tier is reached. 

If the in-house team proposes their own preferred structure, you’ll be able to respond in two ways: accepting the proposed terms details in full automatically or defining each term’s scope line by line.

You’ll see a Client Requested column in the details table that shows the in-house teams preferred structure for each term. 

Use the dropdown in each line to define your offer for that term. 

If you offer the same structure as what was proposed by the in-house client, the status to the left will say “Matched” and if you offer a different structure, it will say “Counter-Proposed”.

You’ll also see this blue alert above the Volume Discount Details form that allows you to accept all of the client’s requested terms by pressing Accept Client’s Request. 

Doing this will automatically adjust every term to match the in-house client’s proposed structure leaving every Status to be “Matched”.

Tiers

This tiers section is where you can define the parameters around to help track what discounts are applied and when. The tier structure is dependent on the tier type proposed in the above Volume Discounts Details section. 

The in-house client also has the ability to determine the number of tiers required. You’ll see a yellow alert box in this section with the definition. If the in-house client has not defined the tiers, then you will be free to propose as many tiers as needed. 

The in-house client can also define the currency used to track this volume discount arrangement. If they have not proposed a currency, then you will have the ability to propose your preferred currency. 

Exclusions from Tier Qualification

In this section, define what spend does not count toward tier threshold. These exclusions affect qualifications only. Note: if Net Fees are chosen above, then it automatically has required exclusions.

Use the Tier Qualification Category dropdown to add your defined exclusions including things like certain practice areas or specific alternative fee arrangements. 

Exclusions from Discount Eligibility

Here, define what spend may count towards thresholds but will not receive a discount once a tier is reached. 

Use the Discount Eligibility category dropdown to select the appropriate exclusions.

For more information as to how to build a full proposal for Rate Review Pro, please view this article here. 

If you have any additional questions, please reach out to our 24/7 Support Team at support@persuit.com.