Solicitors and Pricing
How good are you at valuing the work you do, pricing it and selling that to the client?
I am hoping that solicitors are looking to move away from hourly billing as clients demand more certainty over what they are purchasing but also as solicitors begin to value their work more.
Move from charging by the hour
As professionals, we are promising to produce a particular result from the use of our services. It should therefore be reflected in the price. It is not about how long it takes you on a particular matter but about providing certainty to a client at the start whilst being clear about the scope of the job you are undertaking – talking about the value of the job to the client will help here.
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A fixed price does not have to be a low price
Making the move to fixed price value billing is no doubt difficult – you have to be offering something which the client values and that you can do well from experience. As Warren Buffett said “Price is what you pay, value is what you get”.
Value is not divisible
It is the whole client experience. In fact, value is what that experience meant to the client and not to the firm. Charging for time is very different because you can only offer the price at the end and it reflects a number of things such as how effective and efficient you are; your overhead costs; your competence; what technology you use etc. None of these things are of interest to the client and yet hourly pricing assumes the client should pay on this basis. We should be paid what the job is worth and what we are worth as long as this is of value to the client.
G K Chesterton said: “Why be something to everybody when you can be everything to somebody”.
Solicitors need to focus on strategy and their position in the market. Should your strategy be about deciding as much what you are not going to do as what you are?
If you don’t want clients who always query your bill, or don’t pay it but yet ring you up for ‘free’ advice all the time then you need politely to stop taking their calls and put them off by putting your prices up.
Focus on providing an excellent service to the clients you want and who appreciate the work you do for them rather than working on margins which are not beneficial and lead to high workloads and stress.
Having a narrow focus is not the same as being small. It is simply having clarity over your offering and pursuing that rigorously.
Are you a successful salesperson?
Successful salespeople ask really good questions to learn about the prospective client and to diagnose what they are trying to achieve. The more we probe the more likely it is that we find out what is important to that person and can quote accordingly for the job. I was asked once to provide a quote for sorting out the intestate estate of a client’s deceased brother which was located in several jurisdictions around the world. The deceased had a cohabitant and she was claiming there was a valid Will in Germany. The client’s reason for asking for his brother’s estate to be sorted out was that he wanted the return of money he lent him so the client could give it to his children. I focused on that and explained that it was likely to take less time and be less costly to recover his money than embark on sorting out the estate which the cohabitant could do. This is what we did, and he was so delighted he visited me from Canada to say thank you.
Risk is where the profit is
You may wish to run away from risk and sometimes this is the sensible thing to do. But, the risk is where profits lie – we need to get better at assessing risk and factor that into our pricing. There’s no model for pricing risk by the hour!
Nurture pricing ninjas
Find the people in your firm who are brilliant at pricing a job and ask them to do it. Take pricing away from those people who are poor at pricing. It should be a valued skill in your practice. Nurture it and reward it.
Leading a productive team is not easy but getting your strategy right and using the right leadership styles at the right time can certainly improve your returns. If you would like some help on improving your leadership style then take a look at our recorded webinar – Leading A Remote Team – or give us a ring to discuss how coaching could help you build the right strategy.
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