By Shaun Jardine
Clients like choice and don’t always choose the cheapest option
I worked with an employment lawyer for a large Midlands firm that had a commercial client who wanted some employment contracts. The options which the employment lawyer gave the client were:
- I can send you some template documents with some explanatory notes. You can create the documents yourself, and I will check them. Price £2,000.
- I will do the work for you in three weeks’ time. Price £5,000.
- I will do the work for you tomorrow. Price £8,000.
The client chose the £8,000 option. For them, delivery in a timely manner was very important. They knew they could get the work done cheaper by the same lawyer, but they chose not to take this option. Was the client happy? Yes! Was the lawyer happy? Yes! Was the firm happy? Yes!
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Benefits of Value-Based Pricing
- Better conversations and better relationships with customers about what they want to achieve and how you can help them do it.
- Customer selection within your business will become paramount – you can expect fewer but better.
- You can expect to attract better quality work.
- You won’t treat all customers equally- because not all customers are equal.
- You’ll gain an understanding that value is in the customers eyes not yours.
- You’ll agree payment terms up-front and get paid up-front.
- You’ll (if you choose), stop doing work for free.
- Your people will work smarter, not harder and will benefit from a better work-life balance and improved mental health.
- Your lawyers will feel valued by customers and supported by the firm’s management.
- You’ll be able to (in most cases) scrap time recording and focus on outcomes and results instead of inputs and hours.
- Your business will become more profitable.
Value-Based Pricing | Author
Shaun Jardine is a solicitor (now non-practising) and former CEO of a top 250 law firm, Shaun has a unique insight into what makes law firms tick.
Shaun founded his consultancy business – Big Yellow Penguin – in 2021 with the aim of encouraging and helping lawyers and law firms to move on from the 20th century and adopt practices, including value-based pricing, to make their futures more secure, both financially and operationally, and enjoy practising their craft again.