Only half of law firms claim to be teaching their attorneys about pricing. Even if you have pricing specialists at your firm, pricing is something that has a direct impact on your ability to speak intelligently with clients. If you are lucky enough to have price insensitive clients, congratulations and read no further. However, if cost/pricing might be on the mind of the people you serve, here are a few resources to get you up to speed:
Great background on the evolving role of pricing directors:
The previous article is an interview with Stuart Dodds. Stuart is one of the leading pricing and project management professionals in the legal vertical and former Director of Global Pricing and Legal Project Management. Read his books, articles and podcast resources at: http://www.smarterpricing.org/in-print.html
Your pricing director might even be accredited.
The TVP Institute (mentioned in the above link on accreditation) publishes and excellent resource called Law Firm Pricing Insights created in partnership with Thomson Reuters. You can download the report for free on the sidebar of the TVP homepage.
There’s even a yearly conference hosted by the Legal Marketing Association on project management, pricing, and process improvement.
If you really want to dig deep, you can order the book Law Firm Pricing: Strategies, Roles, and Responsibilities by Toby Brown and Vincent Cordo Jr..
I would also highly recommend meeting with any pricing professional at your firm so they can share insights and strategies that are directly relevant to your practice.
As you are learning about pricing, there is one question to keep top of mind…
Is the decision being made really about pricing?
Both lawyers and salespeople often make the mistake of assuming price is the issue when they have failed to truly understand their customer. I once had a potential customer object to an hourly pricing proposal. When I asked a few more questions, they shared a preference for monthly billing. They had no issue at all with the price and were even willing to spend more monthly if I was just willing to bill them that way.
A popular sales axiom states that “there are no price objections, there are only value objections”. For law firms, the issue of pricing is often about incentives. Clients are concerned that an hourly billing model does not provide the proper incentives or predictability that they desire. While this is likely a topic for another article, here are a few things to consider before assuming price is the problem:
- What have you failed to cover that would eliminate price as an obstacle? Do they truly understand your differentiators? Have you established a relationship? Do you truly understand their business? Have you contrasted what things look like now compared to how they will look for your client after you work together?
- The objection is that the price is too much for what they are receiving in return. What do they wish they were receiving for this price? This could simply be a miscommunication which is exactly why I hate the word “objection” in a sales context.
- Are they even the right customer? You probably aren’t the right lawyer for everyone on the planet so make sure they fit the profile of a client with whom you can successfully partner. If they are looking for the cheapest and you aren’t the cheapest, wrong customer.
Whether it’s pricing or business development, don’t leave essential parts of your career growth completely to someone else. Partner with people inside and outside of your firm, grow your knowledge, and carve out the legal career you deserve.