Osprey Approach’s Podcast Empowering Law Firm Leaders EP.3
Know your worth: Shaun Jardine’s recommendations on adopting the right pricing strategy
In this conversation for Osprey Approach’s popular podcast, Shaun Jardine – former CEO of a top 200 law firm – shares how law firms can realise the true value of their lawyers to win more business, as well as implement value-based pricing to increase profitability.
Shaun, founder of Big Yellow Penguin and author of Ditch The Billable Hour!, joined Amy Bruce, marketing director of Osprey Approach, for episode three of the Empowering Law Firm Leaders series.
The conversation covers how legal leaders can:
- reduce write-offs
- improve work-life balance
- increase profitability
- ditch the billable hour – and increase profitability
- implement value-based pricing (VBP) and the role of the ‘Pioneer Group’
- manage failure
Why ditch the billable hour?
Shaun believes that most clients don’t like the billable hour: “If you give clients a choice of fixed prices they’ll love you for it. So the decision to ditch the billable hour is client-led first of all.
“And [lawyers are] pretty terrible at time recording anyway – there are loads of mistakes. Plus they discount, even double or triple discount, which impacts the profitability of the business.”
Shaun explains that with VBP you get a “three-way triangle of happiness”. Clients are happier with their options, lawyers are happier (which is key for the current battle for talent) and the business is more profitable as a result.
Why is focusing on outcomes important for VBP?
Shaun explains that: “Clients don’t care about the process. They care about whether they’ll be able to move into their dream house before half term; they care about getting out of a relationship so they can be happy again.
“When I ask lawyers what clients buy from them, they’ll often say, ‘my expertise’ and it’s not. They’re buying the outcome. Everyone assumes that most people want the cheapest price, but that’s not the case. We don’t all buy the cheapest bottle of wine, car, or clothes.”
Focusing on outcomes also enables firms to take advantage of technology and innovation. When price and value aren’t connected to the time it takes to complete a process firms can utilise automations and AI to take away the heavy lifting. Tech can also form part of the service options you provide clients that can give you a competitive advantage.
“For example, a bronze option means that the client will only be able to communicate with me via our portal. But if you want the gold service you can ring me every five minutes and have my mobile number.”
Why asking more questions of your clients will allow you to charge more per case
In a previous conversation, as part of Osprey’s Build Better Habits series, Shaun shared a past success where he’d won a client – at a higher price than the competition.
“The proposal looked different [to competitors]. It had pictures of the lawyers who would work with them, it detailed what we’d been asked to do, how we’d complete the work, timelines, what wouldn’t be included etc.
“And the client felt like we’d really considered their needs and understood what was required. And actually, all I’d done was reframe and replayed back to them, in the document, that I had understood what they wanted.”
Shaun advocates having onboarding scripts to provide structure to the initial conversations with clients. “People will immediately hate the idea of a script, but it’s important to have a process and a structure to the conversation.
“It’s worth spending the time getting to know your client because your strike rate will improve, and when your strike rate is better, you will make more money and can charge more… and you can do less work for a higher value and you get a better work-life balance.”
Home truths and success factors of VBP
As part of Shaun’s eight point plan, he outlines some home truths and critical factors of a successful VBP project, which include:
- Your ‘Pioneer’ pilot team will make mistakes
- You will need to call out bad habits
- You will create and amend templates many times
- You will need to trial and test assumptions
One of the ways Shaun recommends creating a safe space is by sharing how much WIP was written off in the previous year: “As a rule, that’s usually 10 – 20% of turnover. So the CFO or CEO can share that with the group to highlight that we made that mistake last year.”
The role and characteristics of the Pioneer Group
The Pioneer Group will guide the change. They will explore the new way of working and participate in the creation of knowledge-sharing tools and templates, prove the VBP concept successful, and will identify and design changes to be implemented by HR, operations, finance, and marketing.
Shaun suggests that the Pioneer Group isn’t partner-led to enable different perspectives to come together and drive the change with all elements of the business considered.
Ditch the billable to improve your client service, retain talent, and improve profitability
Watch the full interview with Shaun Jardine now to discover more advice and guidance on successfully implementing value-based pricing in your firm. You’ll also hear Shaun’s exclusive advice on how to prepare to fail because all change or innovation inevitably results in some failure, but it’s how you act upon the failure that impacts performance.
Kindly shared by Osprey Approach
