MPP#128 Value based pricing w Twojej kancelarii: jak wdrożyć i na co uważać – Shaun Jardine

[MUZYKA] Dzień dobry, nazywam się Acek Stanisławski, witam dziewpodkaście marketing prewnicze w praktyce. To on dycjalna grywamy w agencji marketingowo-deradczyj Tomczek Stanisławski. Od 13 lat wspieramy wymagające kancwary i firmu doradcze, oprażę strategii, branding-u, projektów online i stałe obsługi marketingowej. Jeśli chcesz dowiedzieć się, co możemy zrobić dla ciebie? Zapraszam na stronę Tomczek, myślnik Stanisławski.pl. Zanim przejdziemy do rozmowy z dzisiejszym gościem, przypominam, że 11.12.19 poznaniu, podbędzi się konferencja legal market day. Tym roku przygotowaliśmy sporo nowości. To między innymi Demo Day, czyli dzień poświęcony wyłącznie technologii, Wyza Pcentapas, wieczorne spotkanie twórkinkowe, oraz oczywiście pełen dzień konferencyjny w nowej formule przy 8 osobowych stołach. Demo Day będzie dostępne dla wszystkich chętnych i odbędzie się w formule na oszaufii. Zopatisz tylko wtedy, jeśli się nie pojawisz. Wine Tapcentapas i dzień konferencyjny to propozycje wyłącznie dla osób zarządzających kancelariami i firmami doradczymi. Ponowni z te prelegentów, tematów i stale rosnące grona moderatorów znajdziesz na legal market day.com. Naprawdę zachęcam do udziału. Na dzień konferencyjny mamy tylko 200 miejsc. To nie jest zagrywka marketingowa, tylko realno-grańczenie dwieńkę, once z nowej formule wydarzenia. Ponad połowa mi jest jezużeenta, więc wiesz co należy zrobić. Moim dzisiejszym gościem jest Szączardin, prawnie, który przeszłości zarządzą pod odbustu osobową kancelarią w engli. Od kilku lat zajmuje się w wydarzeniach w kancelariach Balibase Placing, czyli by ceny usług opartej nowartości dla kwięta. Duży skrócie nie sprzedaje czasu tylko wartość. Wiem, że mi kosmicznie, ale działa. Sząny jest tak żałotorem książki Dytrzdy Byl Byl Ałeś. Teurozmowa nagraliśmy dzień po jego wystąpienie na legal market day 2025. Przyznam, że już wtedy nakładałem, że ten wywiad poczeka na publikację właśnie dosyć. Tak może wyglądać marketing, czyli długoterminowa gra z długoterminowym planowani. Zapraszam do suchania i komentowania. So, Sean. Hello, to jest bardzo dobry, że to jest podgast. Dziękuję bardzo, że byli się wydarzeni na to, że to jest. Więc to Friday, po prostu po legalnym marketach. Więc let's start up with your impressions about the conference. A, co to zauwa? Zobacz, że go zbyt bardzo konferencja. Zobacz, że bardzo konferencja. Nie jestem nie wczorajem smokami w tej chwili. Ale to jest bardzo dobry. Zobacz, że to jest w ten sposób. I to jest bardzo dobry. Ale to było, że to jest bardzo dobry. To jest bardzo dobry. Nie jestem wczorajem smokami. bardzo dobry. Sp projections zyski - ziosen Huge BlTimon po beginsie. To Pan na lmulatorze jak jest w przyszłym sze death Axe Frost party elementu rzeczywiście iosa pęchnego Kleleby Palego Ranku uprze�� oainosbow Didn stereo opuszczysz takie Kennepital CONO Sappi PKL A małe pytanie, że w when you're talking about implementing value based pricing to jak to się wydarzy? i jak to się wydarzy? I to jest wydarzenie z tym w jakichś powoliestów. Jak to jest powoli procesy, to jest to za change management project. To nie jest zimnie do tego, że to wszystko to do value based pricing. To nie jest to za change management project. A to to, że to za change management to się wydarzy? To nie jest to za change management. I to jest to za plan. To za to. Właśnie z tym, że zimnie do tego, że to jest to za change management project. Właśnie z tym, że zimnie do tego, że to za change management project. Tu jest zj ballu i możesz empresaimmune, a o botherce, a się roz Analysis i te obowiązki doisim URLs crackersk. I to bardzo prescriptionne. Masz takie to pytanie,CO Route. Kdyby Representatives Ellie z pasign eat tangibleu… Inst stimul dieserbian鼻��ne. 17 – tryżnie »Me ja không» że corrections musimy odw가락ować to, czy się odwagemont Concerny i zewn��ędலne. Nie może step Labourtki i Nobelmu. Tak tak jest. Bo to jest change management project. Już w tym, że się zjeżdżają. Jeśli kiedyś się zjeżdżał, to jest change curve. Jeśli się zjeżdżał, to jest change curve. W beginie, że ludzie zjeżdżał, że się zjeżdżał. I to się zjeżdżają i to się zjeżdżają. Nie będzie się zjeżdżać. Czy to się zjeżdżać? I to się zjeżdżają. To zjeżdżają. Ok, to jest to go odwyszedł. Ja nie wiem, że się zjeżdżał. I to jest go odwyszedł. I to jest, że w każdym razie, że jeśli jest change curve, to jest change curve. Dla jednego wody, to jest change. Dla jednego wody, na razie, na razie. Czyli w tym, że to jest go odwyszedł, to jest wody. Już stąd ma trójmi wody, wody się nie wody się. Nie wiem, że to jest to, że jest trójmi wody. I to są te ludzie z tych, a to jest to ważne, że to jest especially lawy. W People Business, lawyjemy się w tym, że są ludzie z tym, że są naturalne, ryski, argumentowane, niebezpieczne, że się zjeżdżają w tym wody. To jest, że to, że są lawyjemy. Jeśli hissing Polym go zm Lanka gotowe ich pessoas Сейчас kołательно się do piktor Fraktionular. J zijn szeroma persontimerski. My czasem po tym bardzoplease samo si mixy miała telef water aнwala dr Сейчас tu 분ka 2, nimi na Tibetanii. Tak, więc Nigdy jesteście podci Warsawę. Wู่ demekic fathers applauding cantaz. Ogojmy żeby nie zbudcić z instrumentowe joy. To tylko dużo ludzi, jest bardzo sweepia, bardzogrespagno агcie ich,ムcie się, co jest z対 inwardem normalizedami Restaurantów zamong paid Answersowinging Dźwięportowe. Spruption promotionalowe D så tiedzy się plebra i koudni пар서 有 pod impul way z tego Landый ob opponent successes wyorernameuteni. 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To może przez kilka minut. To jest bardzo wytrzymać. I some przynajmniej na wierce w Australii w Polsce. Chciałyby to wyobrazić, że są to wyobraże się na 6 razy. I to są bardzo kompletne, że to jest zakończenie. To jest zakończenie, że to jest okreczny, że to zakończenie. I to jest zakończenie, że to jest okreczny, że to jest okreczny. To jest zakończenie, że to jest okreczny. it will be you're not going to price your own work in isolation. You're going to have to put your proposal to a value council. And the value council meets Monday Wednesday Friday. And they will look at your proposal and they might say, even if you're an equity partner in that firm, sorry, you're pricing throng. You've got to charge more. So this applies to the two eyes on every price rule? Two eyes on every price, absolutely. And as I say, this particular firm have a council. And the members of the council change. Lawyers are encouraged to be trained to sit on the council. So you might have an associate lawyer in a law firm pricing a partner's work. And saying, why are you charging this? Should you be charging more? Why have you decided that that's the right price? We think that's too cheap. We think you ought to up your prices. And the beauty of that as a system is, if I was a commercial litigation lawyer, if you are pricing my work, you're going to be far more bullish about what I should charge than I will be, because I'm the one who's got to speak to the client. And I'll be thinking of that. I'll have a niggling thought that says, I can't charge that. Oh, they won't go for that. Whereas you'll be saying, no, I think you should. And I've been the second pair of eyes on pricing for lots of law firms and lots of people when I'm working with them on a pilot. And once you empower people to do that, and that's important about empowering people to take these decisions, then you can find that they get enthusiastic about the process and they feel more confident in this can be, and all levels of the organisation, and the junior lawyers up to partners can be trying to do this. So I have lists of questions that I gathered on LinkedIn and via private messages from lawyers. Some of them were at the legal market yesterday. Some of them weren't. So I suggest we should go through some of these questions. Absolutely. And you'll answer. So let's start with a question from Jakob. Do you believe you did moving away from cost-based pricing toward value-based pricing? Could lead to abandoning time recording in law firms? It can. And it has. And I mentioned the firm in Perth, Western Australia, who have abandoned time recording? They don't do it anymore. There's a firm in Hong Kong that do exclusively litigation work who do not try and record. Now for litigators, there'll be many litigators saying, how could that possibly be? How could you pitch the billable hour in litigation? Well, have a look at Kevin Boa's website in Hong Kong Boa's law. And in my book, I will concede that there are a number of reasons why you might want to continue time recording. But ultimately, you need to work out what the base price is for doing a piece of legal work. What is the actual cost of doing that? And quite often, the data that firms have in their case management systems and their financial management systems at the moment, is completely inaccurate. Because lawyers don't put down all the time that they put in. And they think, well, a client won't pay this, so I'll stop time recording. And especially if they work for a firm where if they put the time down and they're not going to bill it, they think they might be told off by their team leader or a partner for writing off time. So if you're faced with that kind of environment, you'll think, well, we've given the client a fixed price of 5,000 pounds. I'll time record to 5,000 pounds. I'm only halfway through it. I'll stop time recording. So it looks as though the lawyer doesn't do much work every day because they're not recording many hours. And they do that because they know if they carry on time recording, they're going to get a telling off from their practice error team leader or a partner. And it makes much more sense for them not to book that time. So you never know what the base costs are. And then once a year, when they have the appraisal, you'll be told, all your hours are a bit low. Can you try and do better next year? And you'll say, yes, I will try and do better next year. And so you only get told off once instead of every day or everywhere. And that's, you know, it's sad, but that is a true situation. And what I suspect many of your listeners can identify with. That's interesting. OK, another question. What's your view on pricing based entirely on success fees? And do you consider that success fee may be the highest form of value-based pricing? I don't think it's the highest form of value-based pricing. If you're doing work on a conditional fee and on success, then depending on the jurisdiction you're in, you'll have limitations on how much you can recover for that success fee. So you might be billing all your time. And then you get a success fee as an uplift on that. But I think for law firms, of course, being naturally conservative, risk averse, you're only going to want a certain amount of your cases to be dealt with on a success fee. Because a, you know, quite often in personal injury cases, this is where lots of this work is done. They eat cash in terms of disbursements because you're funding that litigation as you go along, be it medical reports, experts fees and things like that. So from a funding opportunity, they eat law firms' office account cash. And then it might be years before you get paid out, and of course you're still running a firm and you're paying your lawyers and you're paying your overheads. And then you might lose. My old firm, we did a limited amount of success fee work, and we did them in a very niche area of personal injury where the rewards were high, but we were then very, very selective about the cases we took on because we didn't want to take on cases that we thought we'd lose. And you know, that's, again, that brings into account access to justice and a whole new other words of things. I don't think it is the true form of value-based pricing to answer that guys' questions. Okay. So another one, how many years did you spend pricing based on costs before we began pricing based on value? Oh, well, my road to Damascus experience where I came across value-based pricing was in 2017. And so I went to a conference in America. It was organized by a pricing guru called, an American accountant called Ron Baker, who's written a number of books on the subject. And he was principally working with accountancy firms. And I went to this conference. There were a hundred people from all over the world, many of them lawyers. And I was the only Brit. I was the only British person there. And I met the eyes from Canada, Australia, and New Zealand, America. And I kept in touch of them and tested them for years about how you're doing this. Tell me this, tell me that, et cetera, et cetera, so that I could then roll that out in my own firm. But up until then, we were pretty much doing time recording. The odd bit of fixed pricing, and sometimes our fixed prices would be what I call hourly rates in drag, which is where we give a client a fixed price. And we think, oh, it's going to take us three hours. We multiply our hourly rate by three hours. That's the fixed price. But that wasn't value-based pricing. We're not actually factoring in any of the-- we were probably leaving thousands of pounds every-- there were tens of thousands of pounds of value on the table. Because when it comes to value, what people value is different. It's very subjective. And you and I will value things differently. We will drive different cars. We will have different wristwatches. We will order different wine when we go out for dinner. And we would have different clothing brands that we like. And that's the thing. And the same-- because value is complicated, and it's difficult to get your head round. Lawyers don't necessarily understand what client's value. Because we don't have those conversations to try and find out. And that's what we've got to do at the beginning of every transaction, try and find out what the client's value. And there's second part of this question. How did you translate the success of the entire firm? And which had to accommodate both cost-based pricing and value-based pricing, which is at the same time increasing complexity within the firm. You have to get what I call pioneer penguins in each team. These are the people who are open-minded, who are prepared to give it a go. And people will offer say, why do you go on about penguins all the time, sure? And well, there's a great book called, "Is written by John Cotter of the Harvard Business School. It's called, "Our iceberg is melting." And it's a fable about some penguins on an iceberg. They have to find a new home. And if they don't, their iceberg they're on is going to explode. And the colony is going to die. And in every colony, there's a penguin called NoNo, who will say, oh, no, no, no. That will never work round here. And in every law firm, there are noNo penguins. People will say that won't work round here. And when you're doing your pilot, it's very important that you don't have your NoNo penguins involved in the pilot group. We need to take into account what they say outside of the group. But you have to have your enthusiastic pioneers demonstrate that this can work. And once people outside the pilot group see that value-based pricing can work, they'll start saying, "I want you to get involved now. How is that person getting 2,000 pounds more than they were getting the week before?" And the answer might be because they're asking for it, and they're value-based pricing, they're having conversations with the clients, and they're offering the client's service that the client is prepared to pay more for. And once you can demonstrate, when it comes to rolling it out in any organisation, you've got to show and celebrate the quick wins and the successes, and you've got to communicate that, and make sure that you have a communications plan that will say to your staff, "I the via email, or via newsletters, or via team meetings, that well done, Fred, or Freeder within the team, they have done xyz, they have generated more income on this particular matter." And then lawyers being lawyers, get a little bit competitive, and then start thinking, "Okay, how can I do that then?" And that's where you bring your no-no penguins in, and you can demonstrate the concept works. But you appreciate that takes time in an organisation to actually prove these concepts, communicate the success, and bring people who are, you know, might be naturally skeptical, bring them on board, and want to actually embrace the process. So here's another one. Are there any particular practice areas in which value-based pricing is most effective? I think some of the easier areas are residential convincing, and private cloud work. We'll trust some probate. And that's because those are areas where members of the public are involved, you know, it's not corporates by and by in these services. And you, when you think about it, people don't engage with lawyers every day of the week. Some people will engage in lawyers three, four, five times in their life, and people don't understand what lawyers do. So you have an opportunity, let's take residential convincing, where you can create three price service level options to say, "Well, if you're doing residential convincing or having a basic will or something like that, I can give you my bronze level service, but you have to scope out what you're doing and what you're getting for that. If you like the silver service, it's different. And if you'd like the gold service, it's different again, and it's you know, naturally more expensive than, and it's naturally more expensive than the bronze service. Now to do that, and scope out gold silver bronze service options, it takes time, takes a mic, change of mindset by the lawyer, but it certainly can be done. And I'm sure that many of you are listening to this podcast. Well, I've had clients say to them, "God, I would have paid more if you returned my call, or I'd paid more if you could do it quickly, or I'd paid more if you would come to my office and explain some of this." And they don't know that that's something that lawyers could offer. Well, if you put all of this together in your gold service, say for a corporate transaction, or corporate litigation, okay, it will be, "I will come to your boardroom meetings, and I as the lawyer will explain to your whole board what our tactics are for this litigation and how it's going. And I will do these updates with you every month or every quarter. I will come to your office and do this, or I will, in my silver version, I will do it by Zoom. I will join a board meeting and give you this." Or the bronze version might be, "I will just give you a note of where we are in the action, and you can consider that at your board meeting." Well, the person, the client that you're dealing with might think, "I'd love you to come to the board meeting, and tell all my board how this is going, because they might think, I don't understand it myself, anyway, and I'm having to communicate legalese to my colleagues on the board." And then you can add to all these other things. And that's when you create options, when you start creating this, you can do what I call possibility thinking, and you ask yourself the question, "What could you possibly include in a gold will service?" So if you take, for example, the legend that is David Beckham, the footballer, okay? So if we say, "Well, if David Beckham came to your law firm and wanted his will prepared, what service would you give him?" And the answer is, you say, "David, I'm quite happy to come to your house. I'm quite happy to meet with you and Victoria together. I'd be happy to meet with your financial advisors. I'd be happy to meet with all the people who deal with your investments. We would create, we'd create a structure of making sure that it becomes tax-efficient. We then talk about what you're leaving in your will to your children and who's going to perhaps be the guardians of the children. Who should be the executors of your will? And I'd have meetings with the executors of your will to make sure they know what they're signing up for. I'd meet with the guardians of your children, say, "This is what you're going to be signing up for for the children that are under 18," etc. You do all that. Well, we can design systems for that foot, people other than David Beckham, because there are clients who are prepared to say, "I'd love that service. I'd love that service where you cover every eventuality and think about every eventuality for me, and I'm prepared to pay for that." And then by the same token, you'll have clients that will say, "I just like a straightforward, mirror will. I want to leave everything to my wife. My wife wants to leave everything to me and in the event we die together, we just divide it amongst the children equally. I don't need something very sophisticated. That's fine as well." But let's map out what we're doing, different price points, different service levels, it's like airline tickets, every airplane we go on, we get a competent service, we get on one airport, and we get off at the other airport. That's the competent service we get from A to B. The what we experience, depending on where we sit on the plane and how much we paid for our ticket varies. So you know if you're in economy, what you're going to get, you know, if you're in first class, what you're going to get. And that's what we can do with legal services. I think it may be very difficult for lawyers to figure out the way how to have this basic service and then to build on top of that, because even when thinking about myself, I always want to over-deliver or at least try to make things as well as possible. And then suddenly if I'm trying to withdraw a strapp of certain things, I'm thinking like, "Hmm, something's missing in the service." But it probably requires this mindset change that you were saying. The easier way is to start from the gold service. What, and if you do a possibility thinking serve a question, you will say to your team, get all your team together, you get your iPhone out and you put three minutes as a timer on your iPhone. And then you'll say, "What could we possibly offer our clients as a gold service in this particular practice area or for this particular type of work?" And then you write furiously for three minutes and you write whatever pops into your head. You don't qualify it. You just write what pops into your head. So if I give you an example, if I said, "How could I possibly get home from POSLAN today to the COTSWALTS?" Okay, that's where I'm going. How could I possibly do that? Now, I can tell you, the answer is, I am going via an error plane. But how could I possibly do it? And the answer is, I could possibly run, walk, swim, go in a hot air balloon, get a canoe, get a boat. I could rent a horse, I could get a donkey, I could get a skateboard, I could go by train, I could go by bus, I could go by, go by coach. Now, you write possibly, possibly, possibly, and what tends to happen is, when you do an exercise like that, someone will come up with an idea that you haven't thought of and you think, "Wow, that's actually quite, that's quite different." So that is what we could possibly offer. I'm not going to go home by a roller skate today, but I could possibly go by train and Eurostar and go home a different way other than air. So you do possibility thinking with your people, you'll come up with a list of options, that becomes your gold offering, you strip out a number, that becomes your silver offer, and you strip out some more and it becomes your bronze. And the important thing is for lawyers, you mustn't do, deliver a gold service for a client that's paying a bronze price. And that is the challenge where you say to a client, "If a client wants to ring you every day, if you're doing a legal transaction and you say, "I will, part of the proposal is, I will update you every week about what's going on." If the client starts ringing you every day, you know, say, "Look, you're on the bronze service, I can give you the gold service where I will update you every day, I'll ring you every day, but you've got to pay for that because I can't, you know, what you've elected here is the bronze service, you're wanting the gold service and you're not paying for it." And that, when it is called, the matter is going out of scope then and lawyers don't like to have that conversation. And every survey I do with law firms, on the other side. the surveys we did with your people yesterday for the conference, we're saying, are you confident in dealing with matters when they go out of scope? And the answer is no. And that's something we really need to work on because let's face it, we put our cars in for a service when we think we're going to get a basic service for what we're getting with the car. If they ring up and say, well, you need new brake pads, that's extra. We know that's extra. So we've got to say, we're going to pay for that. And we've got to do the same thing. That's really something to think about it during the long walk or many long walks. Okay. So another question, how can you avoid confusion between in-depth cost analysis and truly understand the economic value of problem for the client? Okay. The important thing about value is it's not a formula. If we're a mathematical formula where I could say you've got a legal problem, let's apply the formula, the price is x. We need to know what it costs us to deliver a service. But if we are going to value price that service for the value for the client, we need to understand other things like, what are the service standards that the client is expecting? Are they wanting calls every day, or they want to call us every week? If it's a sophisticated buyer of property, they might say, look, I bought 20 properties. Just tell me when you need the money for exchange, I don't need to know anything else. I trust you to get on with it. If you're a first-time buyer, you might think I want to know everything that is going on every day. So we've got to understand that client's attitude to value is different. We've got to make sure that the service we offer is different. And then when we've got the opportunity to do a piece of work, we need to do what I call apply a lawyer scoring matrix to ourselves. And this is where we will ask our lawyers, the second pair of eyes on every price, where we will ask them a number of questions. And it might be how busy are you? And if your colleague is really busy, you say, we need to put the price up then because you've got loads of work on at the moment. We don't necessarily need this. Is this complicated? Yeah, it's quite complicated, actually. We need to put the price up then. Can you delegate this and involve other members of your team? No, I can't because a client only wants me to deal with it or if there are other reasons why I can't delegate it. Okay, let's put the price up. How has the client been in dealing with you so far? What has the client been like? Are they the kind of client who will send you a beautifully crafted chronology of what went on when and the paginated bundle of documents, cross-referring the chronology to a paginated bundle? Or are they the kind of client who turns up with shoe boxes full of documents and says sort it out yourself? Because if they're the client that comes with shoe boxes of documents, we're going to put the price up because it's going to take us longer to sort this basic stuff out. And the other question is, are you going to enjoy this better work? It's a pretty subjective idea. There's a lawyer. I even enjoy this. Anything else does no? Put the price up. Now, again, this is something where lawyers have to start thinking, "Oh, how does this work? Well, I can give you one example of the firm I work with." Where the Excel calculator for a probate matter said this is a transaction worth 6,000 pounds. Based on the value of the estate. And I spoke to the lawyer. I said, I'm the second pair of eyes. I said, "How busy are you?" She said, "I'm really, really busy." Okay, the price is going to go up then. Okay. I said, "Can you delegate this piece of work?" She was a partner. She said, "No." I said, "Why can't you delegate this?" You've got 15 lawyers in your team. You surely can delegate this. She said, "I can't delegate it, Sean, because I'm dealing with an estate. I've just had to deal with the three daughters of the deceased. Their mum has died. They're all arguing over who gets mum's engagement ring and who gets mum's jewelry." And it wasn't left. It wasn't specified in the wheel. The siblings all hate each other. I'm going to have to have three conversations every time about this particular matter. I can't delegate this to a junior lawyer, because it's people management. I said, "Okay, I said, "We can't delegate it." I said, "What have the clients been up until now?" She kind of glared at me and said, "Well, it's going to be really hard. Well, I said, "Okay, the price is going to go up." I said, "Are you going to enjoy this?" She said, "No." She said, "We've got to go through it. We've got to. " I said, "Okay." Well, based on everything that I've heard, we don't want to do this piece of work at £6,000. I said, "What would you like to charge?" And she thought about it. She said £24,000. I said, "Fine. The price approved. Go and see what happens." She went back to the client and sent them an email and said, "Yeah, we can do this for you. The price and council have come up with the price. It's £24,000." The client came back and said, "Yes, fine. Now, how does that lawyer feel now about doing the work?" The answer is for all of the aggravation that she's going to get involved in dealing with all these problems and moving from sibling to sibling to sibling. She's getting paid for it. And so she was quite happy to do it at that place. Now, this is where it comes back to one of the pees in the book, is permitting your staff to raise their hands and say to their bosses, to their practice-era team leaders, the partners, this client is unprofitable and too difficult to deal with. And one of the every survey I do, I asked this question and I've had, when I asked the question, even if we're doing it internally with a firm, does your firm make you act for clients who are unprofitable and too difficult to deal with? Yes, it is always yes. The lowest yes percentage I've ever had is 50% of staff saying yes. The highest yes percentage was 96% of the staff saying yes. So 96% of the staff in one firm said, "Yeah, we have to work with clients who are unprofitable and difficult to deal with." What's it like working at that firm? It must be so depressing. There must be such a high turn over of staff because we're having to work for clients who are unprofitable and difficult to deal with. So this is really where it comes out. Was there any reason for working with this unprofitable clients? Usually the reason can be because the partners say you've got to. And I have in the past put together proposals for law firms where they know that one of my lessons is we must deselect unprofitable and clients are too difficult to deal with. And I've had one CEO to say to me, Sean, we'd love to work with you, but you're going to say to my partners that we should deselect clients, I said yes. He said, "I can't allow you to come to my partners and tell them that because they won't want to hear it." And I'm thinking, "Well, wow. What's it like being a lawyer at your law firm then?" Because your whole thing is we should deselect clients. And I can tell you, once you make that decision to allow your clients, sorry, allow your lawyers to say we shouldn't act for this person. And once you sack a bad client, you don't sack them halfway through, you finish the piece of work, then you just say to them, "Rather politely, we don't want any more work from you." Then your lawyers start thinking, "Wow." Because they know that I have one lawyer that she said, "I feel physically sick when this particular client rings me because they're so rude and they're not nice people to deal with." Now, we're in the people business. We're in human capital. Our human capital is our lawyers. They come into the business at the beginning of each day and they leave at the end of each day. It's people business. We've got to look after our people. And we know that any survey you look at risk of burnout, work-life balance is very important, while we can and law firm leaders have got to take the responsibility to sack clients that are bad. And if you give your permission to people to stick their hands up and say, "I've got a bad client," then you will find out. And I did this with one firm that had 36 partners on the away day and I said, "Right down the name of three clients, you'd like to sack." And they did. And I pointed to the first guy, I said, "Who do you want to sack?" And he came up with a brand name, a global brand name. I said, "Okay, I said, "Why do you want to sack this global brand?" He said, "We're their third string lawyers. We only get their rubbish work, their rude, their nitpicking. They don't take our advice seriously. They're just not nice people to deal with." And I said in this room with 36 people, "How many other people have got this brand of their names of ssack?" Another five hands went up from different areas of the business. And I said, "Who's the partner that's responsible for this client?" This guy had the front saying, "Oh, it's me." I said, "Did you know this?" He said, "No." I said, "So what are we going to do about it?" The answer is, "We're going to have a conversation, and we're going to either try and turn them into a good client." all going to let them go. Because if you've got a client that is making your lawyers' lives a misery, it's much better for them to go down the road and structure competition and make your competitions lawyers' lives a misery. But look after your own people. Very interesting approach. This will be the third walk. Very long walk. Yesterday you mentioned that we should not rush with creating our proposals because it may seem to apply in that you didn't give it too much thought. But on the other hand, there's a notion on the market that you should answer the request for a proposal quickly because someone might be quicker than you and they will be first to get the job. So which one is true? Or is there any conditioning here? I think that speed is bad for pricing. I'm not a fan of law firms that have convincing calculators on their website where you can put in the value of the property or buying or selling and it will create a proposal for you immediately. Now by doing that, all you're doing is removing yourself from having a conversation with the client. You don't know what they value. All you're giving them is a number and all they've had from you is a number. And so if they're going to compare you with another firm, all they've got is a number. Now if somebody were to ring me up and I'm a great fan of what I call a leaky bucket conversation where you have conversations with clients, if you were ringing, let's pretend you're relocating to the UK. And you're in that. So how's you? Can you give me a price for convincing because I'm moving to the cost world? So I say, yes, certainly. I say, what brings you to the cost world? So you're going to say, well, I'm moving with my job. Oh, okay, fantastic. And where are you going to be living? I'm going to be living in a village called Bloxham, which is on the edge of the cost world's lovely. And I'd say there's a lovely pub there. The join is arms. Have you been? Yes. Well, of course you've been into the pub. You're going to buy a house in the village. You've been visiting the pub. I said to you have children and say, yeah, I've got three children. I said, okay. And they're going to school locally. Yes, they are going to the school locally. I said, so it is important that we come inside the timing of the conversing with when this term starts for school. You'll be saying, yes, it is very important because we'd like them to be in after Easter. So they start the new term together. Okay, I can do that for you, et cetera, et cetera. Now, I have that conversation with you. And then even if I give you a price and I'm a few hundred pounds more, because I've had that conversation with you, you're going to think, well, Sean really understands my situation. He's mentioned about the kids. He's mentioned about he knows about the pub, et cetera, et cetera. I've got confidence. And I have asked you for the work. I said, look, do you want to go ahead? Shall we open a file? I've done an assumption of clothes at the end of that conversation. So shall we go ahead now? And you'll be thinking he gets it. He understands what I'm trying to achieve. And having clients, the most important thing to clients when instructing lawyers is my lawyer understands my problem. Excel calculator on a website doesn't understand the problem. He just gives you a number. And I've had situations where I've created pricing proposals for clients where I've said, this is what we're doing. This is how we're going to do it. These are the people who are doing the work, pictures of them with their direct dial contacts and their email addresses. This is what we're not doing. And this is the price we're going to do it. And this is the time scales that we envisage we're going to do this work in. And those time scales reflect back what the client told me they wanted to achieve. I was 100% more expensive than the next nearest law firm. And I got the work. And the client, when they instruct him, he said, Sean, your proposal showed that you'd really thought about our piece of work. And that gave us confidence. So we decided, even though you're the most expensive, we want to go with you. Now the second further that I knew, equally competent, they would have got, they would have done exactly the same piece of legal work. But that's the thing. If we take time to make sure that clients know that we understand their issue, then that's important to clients. And I did a one exercise recently with a law firm. We went around the table in the pilot group. And I was saying, speed is bad for pricing. How long does it take you to give a client a price? And in this one firm, the head of the company commercial team said five minutes. And I was saying, wow, that's not good. Because if your client is bringing up saying, I need a piece of commercial work doing, and you're giving me a price within five minutes, have you really thought about the consequences of what we're trying to achieve? Have you thought about the service level? Have you had a decent conversation about it? And the answer is, no, they're just saying, it's an X, Y, Z contract. I'm not on those of those. I'll give you a price in five minutes. Well, that's not value-based pricing. That's not understanding what your client is trying to achieve. So that's really why I think speed is very bad for pricing. And one of the war stories I always said, if you were having an extension built at your house, and I'm a builder, and you say, sure, and I want you to come around at four o'clock and have a look at the site. I'll talk you through what I'm doing. And I come around to your house. You say, I'm thinking of having an extension here, and here. And if after 15 minutes, I say, fine, I'll give you a price now. You'd be thinking, hang on, you haven't gone away and thought about it. You haven't measured up. You haven't talked to me about the tiles that I want in the bathroom or my wife has got very firm views about the kitchen unit she wants. You haven't talked about any of that, but I could give you a price that might be right, but it doesn't give you confidence that I've got it right. And this is why taking time, again, taking time, say, well, I need to go away and think about this, put together a proposal that I know is going to work for you. It's not going to be a problem. So if I say to you, today's Friday, I'm going to get back to you on Tuesday. If that is that okay? If you say yes, that's fine. I'm going to get back to you on Tuesday, because clients don't always want information immediately. They are prepared to work on, wait for it, and they are prepared to wait for people to give it some real thought and put together a proposal. And if you're putting a proposal based on value-based pricing, it has to have to have these two or three options or you may go with a single price, but it's based on the value of the client. It doesn't have to have two or three options. I'm a great fan of creation options. And the reason for that is when we're pricing, we don't know how much a client really wants to pay for something. So if they want a basic service, I can give them a basic service. If they want a gold service, I can give them a gold service. And if you create three price points, a client will read what you're, and you always lead with your most expensive option on your proposal documents. So they read what you're going to do, the most expensive option, and they're going to think, oh, I like that. And then look at the bottom thing, that's a bit more than I was thinking of paying. They read the silver option, I think, oh, okay, I can see what's been taken out. And then they're read the bronze option. They go, okay, that's my airline ticket. It gets me from London to Cape Town, but I know I'm sitting in an economy. That's okay. And then they go back and read the gold one, and they're like, oh, but I do like some of those features that are being, now I've had issues with clients where clients have come back and said, look, I can't afford the gold, but I'd quite like some of these gold features. Can you put that together in a bronze one? And they say, yeah, I'll reach in the proposal, and I'll give you another price. And the advantage of giving at least some chop options is it improves your chance of making a sale. If I give you a fixed price and it's take it or leave it, it's 50/50. If I give you three prices and leave it, I've got 75% of your chance, are you buying something from me or leaving it? And we're in the business of selling legal services. So if we create these options, we can give clients choice. And quite often clients don't know that we offer a gold service because all they know is I need a transaction done, but I don't know what you could possibly offer me. And I've had clients ring me and say, or people that I've spoke to about pricing, where they said, Sean, I would have paid double the amount that I was quoted for this transaction just to have the lawyer ring me up. Just to have the lawyer, you know, it was my mum and dad's and they're in their 80s, they're convincing just to spend some time with my mum and dad and explain it to them. They would have paid more. And that's we're in a service industry. And we've got to appreciate that and we can deliver services to clients, I think, a lot better. Thank you for that. Another question, have you observed that value-based pricing tends to work better with clients acquired through traditional pricing methods? Meaning that value-based pricing projects are typically the second and subsequent matters for previously acquired clients? No, because value-based pricing is relatively new in legal service, It's creating these options and creating fixed value based pricing for classes. For many it's going to be new. But what I would say is that if you're in any doubt whatsoever as a lawyer running a law firm, if you just have a quiet word with one of your clients, I say, look, if I could offer you fixed prices for the legal work we do for you, would you be interested in that? And I guarantee you the answer is a hit, I'd say yes, because the vast majority of clients don't like the billable hour. And if you say to a client, how much do you charge and I say, well, it's £600 an hour. The client's immediate response is, that's a lot of money and how long is it going to take? And then I'm going to say, I don't know because I haven't done it yet. So that's immediately alarming to a client. If I say to you, well, let me scope out this project for you, I will give you some proposals and I'll give you some fixed prices. Is that okay? But I will give you a fixed price for this work we're going to do. Is that okay to you? Mr. Lawyer's client. You're going to say yes, because we want that price certainty. It comes back to having an extension built on a house. No lawyer I know has ever said, I would engage a builder and all the subcontractors on a day work basis. No one would do that. Why? Because I want price certainty. I want to know what it's going to cost. Our clients want price certainty. They want to know what it's cost. And finding out that the client is not the right fit for your law firm is really important to find that out. And it's really important to find that out at the beginning of a transaction that they're not the right fit, rather than at the end when you've done all the legal work and then you're having a problem getting paid. Because I'd much rather say to a client, I can do all this work for you. Here are some price points. And they say, oh, they're all of them are too expensive. I can't afford it or I don't want to do it. That's fine. I said, well, good luck with wherever you're going. And I hope it works out well. I find that out at the beginning, not at the end. There's this brilliant video explaining the whole concept with the hamburgers. I'm going to stand through it. There's a link to it in the book and it's how a fast food restaurant would work if you did it on a time basis. So a man goes into a Bob's Barbecue and says, I'd like a pool pork sandwich, please. And the man behind the counter says, yes, well, pool pork and the guy says, how much is that? He said, I don't know. We haven't made it yet. We charged 60 bucks an hour. So Bob's Barbecue, have a look. It's a great fill, but it's actually for a software company, I think. It's a tech company, but inspired piece of work. Yes. Amazing. I'd like to help to working on value-based pricing with a new team because we're talking all the time about the price that we're presenting to a client. And on the other hand, if we will triple it down to our team, how should we approach it? Should they estimate their work based on hourly rates or should they bring me as a leader, or as a team leader, project leader, the value-based estimation on that? How to approach this thing? When you're working with a team, what you want to do is work out what are the products we do? What is it we offer within our team? And if you think of each service we offer as a bar coded product that you'd have in a supermarket. So if you think, well, I'm in a matrimonial team. We act for divorcing parties. For the petitioner, we act for divorcing parties as a respondent. We do pre-nuptial agreements. We will do separation agreements. So work out what are your products? And each one, think of it as being a kind of beans on a supermarket and this is a product range. Then need to think, well, what are the base costs of us doing and delivering these products? And what would the pre-nuptial agreement for a matrimonial? If that is just going to be for a young married couple, having got huge amounts of assets, et cetera, et cetera, we might think, well, our base cost for doing this is X. Then we're going to think, well, if it's Mr and Mrs Beckham who come in and so that all day with Beckham and is going to remarry and he wants a pre-nuptial agreement, we know that is going to be more money. It's going to be far riski. So we need to talk about either products we offer and be, have conversations about how we can value them differently because not every client is the same, not every client's circumstances are the same, and not every client should pay the same. Those are some of the mantras of value-based pricing. And then we need to empower our clients, sorry, our lawyers to also say, we think, from my conversations that I've had with this client, I think it's going to be difficult. I think they're going to be hard work to deal with because then we come back to the lawyer scoring matrix, what are the indicators that say we should charge more. And recently I did some work with the law firm where we had our initial meeting and the CEO was in on the meeting and the CEO told all the staff, yes, you've heard Sean say that we can charge different prices for what we're doing. We can apply the lawyer scoring matrix if we think that it's going to be difficult or the client's going to be difficult, we can charge more. And in this particular firm, one of the pioneer penguins part of this team was a junior lawyer, very junior. And she heard her CEO say yes, we can do this. And a few weeks later I went back in and said, how are we doing gang? Next meeting has anyone had any success. And this young junior and junior lawyer said, yes, I have. She said a client, she was a commercial, sorry, residential, conveyance, single lawyer. She said a client wanted to buy a property for 1.4 million pounds. Our standard rate for doing this is around £3,500 pounds. But when I spoke to him, he was quite rude, he was a bit abrupt. I thought it's going to be difficult. And I thought, I don't need to do every bit of work that comes through the front door. I've been told that by the CEO, I can be selective. So she spoke to her friend, her colleague and a team. And they agreed that they would go back and offer a price of five and a half thousand. So they've increased by £2,000. And I said, well, what happened? And she said the client said, yes, I said, how do you feel? She said, I'm delighted. I will deal with that client now. I'm getting paid for the fact that he's going to be more difficult and more demanding. And I'm okay with that. And it's that creating that environment within a team that is so important. And it comes back again to celebrating those successes, communicating those successes amongst the team. And that becomes infectious. And then other people will see that, oh, look, that person over there did it. I'm going to have a go. And then once they start doing that, everybody gets on the bandwagon. And that's what we want. Okay. Another question, regards to differences between Polish and British legal markets. And so the question goes like this, what percentage of law firms in UK can feasibly operate based on value-based pricing? Oh, there's no data across the whole of law firms. They're the National Westminster Bank to a survey every year. And they recently changed the benchmarking survey. And the last is to ask a question, how many people are thinking about value-based pricing? Now they haven't got enough data yet to be able to identify how many. I did attend a survey a couple of years ago where a big software company was doing its state of the financial market, legal financial market. And they said, we have surveyed 700 firms, et cetera, et cetera, et cetera. And this is, as I go back a couple of years, and I was on the webinar and they said, there's anyone got any questions? I said, yeah, I said, and I went on and said, how many of the firms that you have surveyed doing your detailed financial analysis, how many of those have value-based pricing? Now it's came back none. And one of the problems, of course, with value-based pricing is that if we're just charging by the hour, and if we accept that in the hourly rate world, the slowest horse will win the race. As long as you keep charging your hours, you can do it slowly as you like. You will earn more money. It's sometimes hard to tell a room full of multi-millionaires that their business model is wrong if they're just charging by the hour all the time. And I've heard stories where lawyers have done work, gone to giving it to their partner. The partner said, how long did it take you to do this? And they said three and a half hours. One partner said, go away and do it again then, because it didn't book enough hours. It's one book that I read, a biography of a lawyer, where she talks about how the partners at her law firm would play golf with clients at their golf club. And they would play golf on a Saturday morning and they chat about their matters. And the lawyers, the partners, would book that time for playing golf with their clients against the client's matter. It's madness and it's wrong. And lawyers will pad time sheets, they will over record time and they will under record time. And that's why it's not the perfect, it's not a great solution and that's why we need to get to value-based pricing. Yeah, the stories of building time under shower or thinking about clients matters. Absolutely. You know, a building waiting time, building traveling time. You know, I'm traveling to a meeting I'm going to charge the client this travel time for me sitting on a train going to visit them. I'm going to charge them that time. But actually, while I'm doing that, I'm going to be working on someone else's work. I'm going to charge both. And this is where you get in all kinds of conversations about what is ethical when it comes to time recording. And for people that might be, some of your listeners might be pulling their hair out at this point thinking, "Oh, this is just sounds nutritious." I could say, if they have a look at the Victoria State Commission in Australia, their regulator actually now has value-based pricing as one of the preferred pricing options. Because if I'm giving you a fixed price for doing what I'm doing, regardless of time, doesn't matter about the time. I'm giving you that fixed pricey. We're not going to have an argument over fees. If you say, "Yeah, I'll pay you $5,000 per person," or "I invoice you $5,000." That's great. We're not going to have a problem over age debt. I'm not going to have a complaint about the price because you've agreed it up front. And that's where value-based pricing and giving fixed prices can take away such a lot of complaints that compliance people deal with in law firms. Because usually, at least half of the complaints that compliance might be dealing with is from clients who said, "I was never told it was going to cost this much. I was never told you were going to do more hours because it went out of scope." And why don't lawyers do that? Because we're frightened. We don't want to have that conversation with the client. And what we tend to do is do the work anyway. And then at the end, we've got a big bill of working progress, and we send the bill, and then we duck. And we put our heads down and see what happens. It's not a great business. No, really. So there's one more thing I would like to discuss with you today is the very specific group of clients. And these are the in-house councils. Because when law firms wants to work with figure businesses, probably there are in-house councils on the other end of the contract. And how to work with such clients? Because when both sides are used to hourly billing, that's fine. I mean, the status quo, we have status quo and that's it. But what happens when in-house council starts asking about value-based pricing and the fixed prices? Because they know there's something inherently wrong with billing by the hour. Right. Okay. Lots to unpack there. The first thing is most in-house council have come from an environment where they were working in private practice and we used the time recording. They have had to probably fill in many timesheets themselves and they had to get used to that. And then they perhaps might have decided, "I don't want to do this anymore. I want to go in-house." Now in-house council, I've got the utmost respect for in-house council because usually they're very small teams. They have got loads of stuff that is going to be dumped on their desk of different matters, which could be commercial matters, could be employment law matters, could be a variety of matters that they perhaps aren't experts in. And then of course, they have a legal budget that is set by the corporate organisation where the chances are, there's always pressure on that budget to say, "We don't want to pay this amount going forward." Next year, you need to spend less, you need to spend less. And how can they spend less? Well, the answer is they can start saying to their lawyer panel clients so the client, the law firms that they engage, "I need fixed prices from you." And the pressure can come the other way onto that law firm to say, "I need you to give me price options." And if a law firm is saying to you, "Well, I can't do that," well, maybe you need to think about getting another lawyer then, because actually, if lawyers do, are prepared to start thinking differently and we know they can, the pressure can come from in-house counsel on to law firms to say, "I want fixed prices. I want gold silver bronze prices." And there might be transactions for that in-house counsel that is, "Yeah, I really do need the gold service on this." I really need to make sure this is right. It might be, some of it is, well, we can afford to take a little bit of a risk on this matter. A bronze service will be fine. And quite often, you will get corporations and CEOs of businesses saying, "Look, I wanted my law firm just to do me something general advice. You know, it didn't need to be." I've ended up paying for a gold palace when actually all I wanted was a tent. You know, or something like that. I didn't need this level of detail or whatever. And they don't want to pay for it, because they might find they are prepared to take an element of risk. And that's where you can pass down the pressure on legal fees back onto the law firm. By saying, "I want you to create proposals." And more and more law firms as they look at value-based pricing. If you accept that is a differentiator that becomes one of your unique selling points. You'll be offering those to corporate clients anyway. By saying, "We can give you these gold silver bronze services. We can deliver on speed. It might be, you don't need it really, really quickly. It might be, you are prepared to wait for two or three months. Great. Well, I can do a different price. But you have those conversations. So in-house counsel, they're controlling the purse strings. They've got a budget. They've got a need. And now they've got to start understanding how value-based pricing works. And then saying to their law firm panels, "This is what we want from you." And I think that's going to be quite interesting. I'm looking forward, I'm speaking at a conference later this year of in-house counsel about implementing value-based pricing. Because we can apply some pressure, client side, onto law firms. So watch this space. Yes, I mean, it's very interesting and I think what may be very demanding of in-house councils that they have to switch to their billing by the hour mindset to billing based on value. Because otherwise, they can't tell what the value will be of the service that they are asking for. Absolutely. Absolutely. And they know what the outcome is they're trying to achieve. But you have situations now where you have big law firms sending in all their time sheets to their clients. So they can scrutinize it. And the clients have got people scrutinizing the time sheets they've had from the lawyers to say, "Well, you've put down an hour for this matter here. Our time recording shows that that meeting was only 40 minutes. So we want to knock off 20 minutes." And it becomes a complexity tax, really. Because I'm in-house, I'm recruiting people. Just scrutinize my lawyers' bills because I don't trust them. And that's what it boils down to. I don't trust them. So actually, what could I trust? A great price with me upfront. 5,000 pounds. And now I'm going to get, or 20,000 pounds. Whatever it is, I'm going to agree a price upfront. And that's what you're going to deliver. And when you think about it, if you have a pricing pyramid with loads and loads of lawyers and a friend of mine, he was the COO, a very big global company, it was going through a big acquisition. And he said, "Sure, I've just sat in a meeting where there were 20 lawyers on a Zoom call, but only two of them spoke." And he just said, "I think I'm being turned over here on these prices." He said, "Why can't someone just do a transcript?" If they're all these 20, you have to be involved. But I don't know if they do, but assume they do. Why can't someone do a transcript and then just circulate the note? Instead of them all sitting on the call for a couple of hours. Because I know I'm going to get 20 lots of chargeable time, booked on that matter. And clients won't accept it. This is something that we really need to wake up and smell the coffee. And in House Council, I know that you're working with the Polish in House Council Association. Well, they could perhaps start pushing back a little bit on the lawyers here. Let's see what happens. Yes, let's see what happens. Sean, thank you very much for making time. It was a pleasure. And I hope that at least one person will apply all these lessons that you shared today and yesterday at the legal market day. Well, thank you very much. I really enjoyed my time with Poland and I'm so happy. sure it's not going to be the last time I'm here. Thank you. Thank you.