Transcript for:
Value-Based Pricing in the Legal Sector

for those of you who aren't quite sure who I am my name is sha Jardine uh I am as I describ myself as a recovering lawyer uh I for my sins was the CEO of law firm called breon's rugby banry bis the legal hubs of the universe and um uh I got involved in value based pricing in 2017 when I went out to America to a 100 lawyer conference and I was the only brush in the room and I'm delighted that I've thank you thank you to Rob for being able to survey you guys I we started this last year with thank you to pexa for sponsoring it by the way and thank you to the 53 firms so far who have responded now there's more more than 53 firms here today if you haven't responded to the survey uh look through your emails from Rob and please do so the reason reason for that is it is really quite interesting to take the temperature of what's going on in pricing and confidence in the residential sector this is the only survey that does it and so it'd be great to get some feedback we're not going to shut the survey for another week or two yet so you have got time to do it but this is a little snapshot of what it's been telling us okay broken it down into a few areas and the first one is we were looking at confidence okay I'm confident that work what we do helps our clients well done you 53 people or 53 F 96% that is the highest I've ever had and I've surveyed lots of law firms and lots of different disciplines so 96% we're we're bloody good at what we do we help our clients this is fantastic stuff you wouldn't believe how low some of the other scores of of other departments in your firms might be when we ask the same question I believe my firm's charging model is a good reflection of our brand values yeah I'm up there around the nearly 60% yeah I I think so to some extent now I always put to some extent in there to gives you a little bit of a a little bit of an exit left if you're not quite sure you can say yeah to some extent and then some people say yeah not at all actually um but yeah okay my charging model is is in accordance with what we do as a firm our brand these are some of the comments I've got from the comments that you have made which is wonderful you know it's part of our strategy in growing the business to Target high net worth clients and get higher fees we offer a five sta service and so charge appropriately for that and then the firm's pricing to some extents the are free the fees that are charged by those who get away with providing an in inferior service and there's one thing that I think is common about residential financing sector is you're always looking over your shoulder at what the competition are doing quite a lot um so these those are some of the comments I got I then said how good are you at dealing with price objections when we get them you know to somebody let's start working out how we deal with objections what we say why is it we charge what we do and why are we worth it we got to keep thinking about that L'Oreal moment I believe that some of my clients The Firm act for should be dismissed as they're too painful and unprofitable to deal with now you won't be surprised that's not the highest number I've ever had I the lowest number I've ever had is 56% from a people in one firm and in one firm it was 96% 96% of the staff were saying yeah we act for people who aren't very nice now if you're acting for people who aren't very nice stop acting for them you but how does that happen well you've got to if we've got managing Partners or we' got Partners or we got team leaders here you've got to start empowering your staff to have these conversations work out I when I go into firms I do training I get them to write down and name three clients you want to stop acting for you wouldn't believe the overlap happens all the time uh so yeah this is where we've got to think let's start acting for the people we want to that we enjoy working with and that only happens when we Empower our people to do that these are the comments we got on this we're trying to do be too kind it often comes back to bite us yeah I bet that's true fear of complaints or regulatory acting look I'm not saying that we get halfway through the transaction and we stop acting it's just that when we go forward if these people come back we stop acting that we that our lawyers are scared of just having a conversation that we don't want to upset referring agents really got the referring agents saying well okay that's your business model to take this stuff coming in from referring agents this is your business model I like the one at the bottom all of the staff understand that the firm will not act or continue to act for abusive or disruptive clients we will decline instructions based on poor or uncertain initial dialogue if I was a young conveyancer I wouldn't work for that firm please that's their policy let's state it let's make sure our people know this stuff we looked at Finance I believe that those in my firm understand how decisions impact profitability to some extent I.E we don't really know we don't so why not let's start having conversations with our teams about the profitability how it works the great work that you do and how what that leads into into your firm because that's a low number that you've got the on the yeses there but it's a typical okay it is quite typical I once interviewed I surveyed this a and I had uh no from everybody which was slightly alarming because one of the people in the room was the head of Finance but uh anyway they're not here today I don't think um do you pay introduction fees okay never sometimes usually this is this there'll be more more about this in the survey please respond which are the ways do you think could help us to improve profitability bit more training would be nice bit more training about how we use our data and you've got wonderful practice Management Systems I'm sure youve got wonderful reporting systems I'm sure but I bet you don't spend a lot of time looking at what that data is telling you um ceasing to act for some existing clients creating documents details of our pricing policy most firms don't have a pricing policy litigators have hourly rates lots of people have hourly rates that's our policy we're charged by the hour and but we don't actually have this is what we're after so we need to do that ceasing competing competitive pricing some really interesting stuff here please fill the survey in and contribute to that when you look at your time recording policy what do you think applies well you won't be surprised know lots of firms saying I don't time record I always think it's interesting that firms that do make their staff time record when uh they give fixed prices because you think what is the point of that and those of you who are working in the time recording environment will be told yes because we need to know in case we need to look at it if there is ever a complaint or something like that we need to know what we done and then ask yourself well how often does that happen and how often do we get that data out and the answer is probably never okay so people saying yeah I'm good at it some people saying yeah I struggle some people think our policy is not detailed enough some people think it's too detailed okay I don't time record and then at the bottom I think it's pointless and I'm with that I'm with that group there I was I was a litigation Boyer so you sck my knowledge of convert that a frogs here or a penguin here um in your current model how important is CLI account interest crucial significant a little not at all now that I think that's an interesting thing and something that you guys have got to start thinking about how important is client account interest into the profitability of what you do and the reason for that is you may have may not have missed this thing in legal Futures where the regulator is saying the cost of Regulation would drop like a stone if lawyers didn't hold client money and we all know about axium ins and all these other ones that have come back to bite the profession and you'll all be paying more out to the compensation fund but this might be the direction of travel if it is a direction of travel then start doing when you start doing your budgets when you're not factoring in and profitability of your firm when you're actually factoring that into uh how much money the firm is making because I bet what at the moment your client account is one of your best fee earners pricing what prevents you from charging more the partners or the management okay nothing the local market the local market because we fear losing our work and when I saw I chatting to lots of people today about the local market people say oh well we we're in this part of the world we can't charge more than that I said well funny enough I was chatting to somebody outskirts of Newcastle charging three times what you're quoting the market you know what what is this market usually it comes down to what you're confident asking for the market is your self-confidence um do you think your price do you think you should increase your prices yep by 10% 20% 30% up to about I think it's about 28% saying yeah they're fine as they are but actually you're thinking yeah we ought to put our prices up so why don't we when someone joins your team how is pricing training undertaken it's a bit ad hoc no idea we do a bit of face to face it isn't we use quoting software uh and other I can't remember what the other was in the comments when I ask this question usually of other teams okay other teams the most common answer is it isn't there is no pricing training undertaken there's no pricing training or or they say we tell you what your hourly rate is that's about how how far it goes so that's something we might want to start thinking about how when people join our team how are we going to tell them what we do voting software ad hoc not not all newcomers are provided with a full list of fees I must confess I scratch my head when that comment come we all newcomers join the team but we don't give them a full list of fees and we're not aware of how this work hello anyway we have a low staff turnover no one has joined our for over 10 years I I thought God bless you I thought there um you and again I don't know where these answers come from but anyway lovely it made me smile if nothing else um I believe my firm tend to reduce prices based on what our competitors May charge not at all to some extent we're a bit guilty than that we do that a bit and always lovely that's Lovely isn't it we just embark on our race to the bottom so yeah okay so we're we're not getting over halfway of we don't we do we dabble we keep an eye on what the competitors are doing we are price Chasers we're not price setters at my firm we have fixed priced agreements which contain gold silver bronze levels for clients to consider now I wrote this question because I'm a great fan of this but no we don't do it we don't do this to some extent somebody does but no we we don't do any of that that not at all that not at all is the highest I've ever had as an answer for that question every other every other discipline is more than that 90% of commer nah not at all we're not doing that how often is it reviewed pricing annually quarterly monthly no idea but ad hoc you know if I was checked to one C here today said well I my pricing Alters practically by the month because when I know how many I'm going to take on and I'm getting to that limit I'm putting the price up or I'm going to start turning work away but I'm on top of what my numbers are going to be so we got to look at pricing how often is it reviews because in my view annually isn't enough think back to the stamp Duty holiday when that was going mad prices should have been going up very very very quickly especially when your people were getting burnt out and absolutely knackered and all of that kind of stuff we've got to start doing that and the management have got to start owning this kind of thing I believe that my firm has a mindset that requires lawyers to take on every piece of work that comes our uh uh into the department we are not allowed to turn work away that is quite a high not at all number in other disciplines in other areas of the law firms that that that number of Yes actually comes up quite High the culture of the firm is you got to do everything that comes into the office so what is it when we look at knowledge and training good question here I would be happy for someone else to price the work and on board it and once they've done it hand it over but they will seek they will ask me questions about what's going on before I price it would you be interested in that no not at all I okay you don't want to do you don't want to do the price you know you don't want to do anything different but I I want to control that to some extent is interesting that I think when we do the comparison with last year I think that's probably gone up to what we did last year but I you know I'm not going to close book on survey till you've all responded more of you have what stops us from setting and charging fees based on value nothing so you're the ones who decide don't want to do it the fear we will lose work to our competitors again we're looking over we're we again we're we're we're we're being the price Chasers we're worried about that refer as won't permit it well I might tell you what I think of that but it's not complimentary um and lack of confidence things like that okay so what stops us from doing this and the answer is nothing probably comes back to training you know we need to learn how to do this stuff this is a question ask all the time £650,000 registered sale no mortgage okay jointly owned what would you charge this is because you will always be telling me there's a market rate for doing this okay there's a spread that we've got less than a thousand I spoken to some people today are saying now I'm less than a thousand but that's cuz that's cuz we're in the east of east of the country and I saying well know I'm the north of the country you charge two and a half Grand how did they get two and half Grand they ask for it simple as that you know so it's not Geographic but that's the spread at the moment you might be looking at this thinking we charge more than that complete my survey please because I want to get this kind of data if LeBron actually I'll just go back I ask that question in every survey I do with every firm that I going to train I did some training with the firm I'm not sure if they're here cuz I haven't seen a Client List they had 15 residential conveyances at this training day they all got this question anonymously in a survey to respond to me 15 people from the same firm how many different answers do you think I got you let me ask you down the front how many six six any Advan on six 16 15 I got 15 15 different answers from the same firm in the same room ranging from 1,650 to 5 and a half Grand okay we got to talk to each other people we got to start having these conversations and actually working out what is we're doing if we could have a bron bronze bronze silver gold think of airline tickets every air aircraft lands in the same destination every everybody gets off in the same city okay it's the service you get while you're on the plane that alters okay that's how we think would you be enthusiastic about that not many of you uh I would give it a go sounds interesting no I don't want to do this I don't want to do that CU I don't want to yeah that's quite a high no figure if you don't mind me saying um that your colleagues in other disciplines are usually more enthusiastic about this kind of stuff um I would like to have training on how to do that based on a variety of factors workload time pressure ability to De delegate yes tell me how to do that and increase prices nope I don't want I don't want to have any of that nonsense this mumbo jumbo uh then possi is okay but we've got to think about pricing clients differently aircraft lands in the city is the way that you get there the service that you have when you go there it's different what's morale what's your issues what's going on well I GA you had some sessions this morning going on about burnout and work life balance you want risk of burnout work life balance challenges always up there lack of confidence when ask asking for an increased fee when the matter is progressing that's something that comes up okay these are things definitely lack of confidence people are saying lack of available qualified conveyances that's causing us problems understanding the client's needs and needs meeting them and that half of that is can be having conversations with clients at the outset and understanding what they are and then when you think about what are the most profitable matters you've had what influen that type of client decent lawyers high value transactions complexity of the matter fluke pure luck love that one uh or others okay so the there are a variety of factors that impact when you look at what is profit usually okay it is type of client comes up a lot higher the clients who value what you do you know you provide a good service that was the first slide 96% I believe my firm's management understands that this impacts the well-being impacts profitability uh yeah got get over halfway yeah I believe the management do do that and then to some extent really okay so again we've got you've heard a lot about that already and if you're a convi you can wave the magic wand would you work in another area of law still remain a conveyancer or leave the legal profession I think it was about that this was about like that last time I'll do the comparison please do the survey let me know what how you're thinking because if there's a scarcity of Labor because people are leaving you put your prices up because you're becoming a rare breed okay so what's the future asked about pricing add-ons this menu of lists you love you love these little packs you send out and if it's going to be this how many pricing add-ons do you have 1 to 5 6 to 10 11 to 15 over 30 right easy little pricing add-ons that you do exchange and completion the same day I'll charge you a bit more for that or whatever it's going to be I did a piece of work for today's conveyance it's available um on their website 120 add-ons I discovered that and it's still not all of them I suspect this is what you guys come up with of little wizo wheezes of how you can screw a bit more money out them and you know and I think actually it's probably best if we try and avoid having any have a conversation and a price and charge more because we built that into our price because if our if our business model is we charge 400 quid plus the add-ons it's like the Builder who comes around your house gives you low price and then just makes all the money on the extras what do we think of the conveyancing market next 12 months going to be busier less busy about the same okay so you know we're not thinking the predominantly we're not thinking this is going to be a market that is going to slump what you think it's going to happen the number of conveyancing lawyers over the next 12 months it's going to decrease you become a rarer breed the prices should be going up okay so what does this tell us I think what I think is I think confidence is still a bit low I still think that we need to think about our pricing I still think we need to believe that we're worth it I still think the management need to empower us to put our prices up to turn work away and stop taking on stuff that perhaps isn't profitable and know that it's not going to be career limiting if we give a quote for a piece of work and we don't get it I could leave you one one story because I'm just about oh no I'm looking at that clock that we know is fast okay I will leave you one story it's a probate story right nobody prices their work in isolation is one of the golden rules of value based pricing there's a probate lawyer Exel spreadsheet calculator for the probate said 6,000 quid part of the Matrix of asking questions one of the questions on here that you you you're not interested in learning apparently the majority of you is asking questions about that job any job it can be how busy are you I'm really busy price goes up how complicated is it it's complicated price goes up do you like working with this client no price goes up okay these are the things you ask I did this with a probate calculator 6,000 quid probate calculator partner comes to me she said I said how busy are you she I'm maxed said okay price is going to go up then I said can you delegate this she no I said why can't you delegate okay this is only 6,000 prob you got 15 people in your team she could I can't delegate this Shan because I've just left the three siblings in my office arguing over who gets mom's engagement ring mom's died they're arguing over the jewelry they're arguing over everything they're going to be a nightmare I cannot delegate this to a junior member of Staff fair enough I said okay I said um are you going to enjoy working with these clients she said no absolutely not not I said is it complicated she said no she said it's just going to be a nightmare she said they're arguing over this we haven't even buried M yet they are ground mom's in the funeral home still we're arguing over everything she knew it was going to be a nightmare two pairs of eyes on every price I said what do you want to charge she said £24,000 I said fine price approved doesn't matter if we don't get it at 6,000 she went back to the client said $24,000 clar said yes how does she feel then she doesn't mind dealing with all that rubbish she's getting paid to deal with it and she knew she didn't want to do it at £6,000 and the mechanism empowers you to turn work away because it doesn't matter if we don't do one thing is sure is eggs is eggs at £66,000 you don't want to do it send it to the comp competition let them have the Agro and that is leads me to the second and my f second Golden Rule but my final point you will never get the pump fist price unless you ask for it and that is what I would encourage you to do I do think we need to do working on our pricing if you want to know more about this I've written a book it's available on Amazon it was even in wildy book shop in Lincoln's in believe it or not but they have them on sale or return so I don't know if they ever sell them but anyway so if you want to read more about that it's in the book and um I don't know if I've got time for any questions he said look at Robert probably not not I I'm going to be around probably until your next coffee break or something like that I'm a big bloke with the inflatable penguin and yellow shirt but thank you very much for list right we're just gonna set the uh stage up for the next session