Pricing on a page (or 3)

Many would be aware of our passion for up front, guaranteed fixed pricing, rather than the traditional time-billing model of most law firms – previous posts explore this in more detail

The firm of the future is in fact the firm of now

Fixed Pricing and Change Orders

Insights on the Journey to Value Pricing

Much of our inspiration in this regard comes from the VeraSage Institute, a revolutionary international think tank which.

For many years VeraSage has been challenging professional services firms to price their services other than with reference to the Marxist derived labour theory of value that is time billing.

The VeraSage Institute founder (and LinkedIn Influencer) Ron Baker was recently in Australia.

View were very fortunate to host Ron present both a webinar and in person workshop. For those who missed the events and would like to access streamed versions of the recordings click here.

For those interested, leading Australian based VeraSage fellow John Chisholm (see - https://www.linkedin.com/in/chisholmjohn) also profiled a sketch note of the workshop or as he described it ‘pricing on a whiteboard’ in one of his recent posts – see - http://www.chisconsult.com/pricing-on-a-whiteboard/

Image credit: Dyan Burgess

Insights on the Journey to Value Pricing

For those who do not otherwise have access to it, the contribution I made to a recent eBook published by LegalTrek is extract below. The complete eBook that features among others Ron Baker, David Wells, John Chisholm and Ed Kless is available at the following link – https://legaltrek.com/afa-ebook/ Our legal services business has operated entirely on a fixed price basis since 2004.

This said, timesheets were not completely eliminated until 1 July 2013 (see photo attached!), shortly before founding our firm View.

There have been challenges, mostly unpredictable, however unsurprisingly no one in the team is likely to volunteer to fill a timesheet in ever again.

A key influence has been VeraSage, the international think-tank dedicated to eliminating hourly billing from the professions (see - http://www.verasage.com/). Consultant John Chisholm is the leading Australian based Fellow of VeraSage and is a fantastic mentor, as are the trail blazing firms associated with the group – see - http://www.verasage.com/thelist/

The key lessons we have learned in running a truly ‘timeless’ firm include:

1. Parkinson's Law is a serious challenge even without timesheets – perhaps counterintuitively our key performance metric is still time related; that being – what is the duration between agreeing on a scope of work and delivering that scope to the customer.
2. Communication both internally and with customers is vital. Many law firms only exist because of Murphy's Law (i.e. everything that can go wrong will go wrong). Successful fixed pricing almost entirely depends on carefully planning and agreeing a defined scope. If there is a legitimate change to scope that could not have been identified at the start of a project, there must be real time communication within the team and immediate engagement with the customer.
3. Centralisation of all team learnings in a logical and easily accessible manner is critical. This includes (using VeraSage founder Ron Baker's language) ‘AARs’, being after action reviews (see – https://www.linkedin.com/today/post/article/20130303194245-38251380-replacing-the-performance-appraisal). This 'non-billable' concept is rarely, if ever, done in a time billing firm. In a fixed price firm it is a discipline that must become automatic.
4. The Goldilocks Principle helps explain why we always provide the customer with alternatives in the level of service that is provided. The time billing professions remain essentially the only industry in the western world that do not empower their customers to choose service levels, and this one change to our approach has been vital.
5. The Donkey Principle explains that the best performing lawyers in a time billing model are generally of least benefit in a fixed price model - the impact of this culturally cannot be underestimated.

There are numerous other impacts that we have seen, sometimes on an hourly basis (no pun intended).

Ultimately, the most important lesson is the depth of cultural change because what timesheets do (even when you are fixed pricing) is create a focus solely on what is billable.

Without timesheets, the focus is solely on what is valuable.

This one concept has an impact on every part of a professional services business. Increasingly we are finding customers get this, and are allocating their legal spend accordingly.

As I suspect is the case for everyone in the VeraSage community, we happily share our experiences with others contemplating changing their business model.

As mentioned previously, we began the journey to address many of the challenges of redefining the professional services firm business model over 10 years ago.

For many, the journey has started more recently and we believe it important to share our learnings. Our upcoming July roadshow will be a full day example of this.

Before then, our free webinar on 28 April will also share a number of insights (see - https://viewlegal.com.au/product/free-webinar-foundations-for-the-future-28-april-2016/)

Image credit: Brian Turner cc

The Soul of Enterprise … and the future of the professions

Many would be aware of our passion for up front, guaranteed fixed pricing rather than the traditional time-billing model of most law firms – previous posts explore this in more detail http://blog.viewlegal.com.au/search/label/fixed%20pricing.

Much of our inspiration in this regard comes from the VeraSage Institute, a revolutionary international think tank which, for many years, has been challenging professional services firms to price their services other than with reference to the Marxist derived labour theory of value that is time billing.

The VeraSage Institute founder (and LinkedIn Influencer) Ron Baker and fellow VeraSage Senior Fellow Ed Kless host the popular weekly iTunes radio show ‘The Soul of Enterprise’ – see - https://itunes.apple.com/au/podcast/soul-enterprise-business-in/id893874169?mt=2

Together with 2 leading Australian based members of the VeraSage community John Chisholm (see - https://www.linkedin.com/in/chisholmjohn) and David Wells (see - https://www.linkedin.com/in/david-wells-a27a2011) I was fortunate enough to appear on the show, exploring the excellent Richard and Daniel Susskind book from 2015 ‘The Future of the Professions’ – see - http://www.amazon.com/The-Future-Professions-Technology-Transform-ebook/dp/B010N9QJ5M.

A link to the podcast is as follows –
https://itunes.apple.com/au/podcast/soul-enterprise-business-in/id893874169?mt=2#episodeGuid=http%3A%2F%2Fcdn.voiceamerica.com%2Fbusiness%2F011449%2Fbaker021916.mp3%2F90565.

We began the journey to address many of the challenges the Susskind’s have identified over 10 years ago. For many, the journey has started more recently and we believe it important to share our learnings. Our upcoming roadshow (see - http://viewlegal.com.au/roadshow-interest/) is another example of this.

The Soul of Enterprise interview explores many aspects of the book, including:

1. The likely impending end of ‘The Grand Bargain’ – meaning the monopolistic markets enjoyed by the professions will cease to exist;

2. The absurdity of the incumbent time billing business model in the new normal;

3. Technology and its re-writing of the rules of the professional services game;

4. How the ‘AI Fallacy’ lulls professionals into inertia – meaning that whether artificial intelligence performs human tasks better than humans is irrelevant; the only question is ‘does the job get done’;

5. What’s next and what’s now for professional service firms – by starting at the start and choosing a business model that sells value; not hours chalked up.

The Art of Value

Many would be aware of our passion for up front, guaranteed fixed pricing rather than the traditional time-billing model of most law firms.  

A summary of our approach in this regard has received wide spread interest – see the ‘Old View v New View’ table on our website at - http://viewlegal.com.au/a-new-view/

Much of our inspiration in this regard comes from the VeraSage Institute, a revolutionary international think tank which, for many years, has been challenging professional services firms to price their services other than with reference to the Marxist derived labour theory of value that is time billing.

The VeraSage Institute was founded by LinkedIn Influencer Ron Baker and we are proud to be listed as a VeraSage ‘Trailblazer’ (see - http://www.verasage.com/thelist/).

Another of the Trailblazers listed is the business from the United States founded by Kirk Bowman known as ‘The Art of Value'.

Kirk hosts a podcast on iTunes and recently I was fortunate enough to be featured on it.

A link to the podcast is as follows - https://itunes.apple.com/au/podcast/art-value-show-discover-value/id924824616?mt=2#episodeGuid=http%3A%2F%2Fartofvalue.com%2F%3Fp%3D4849.  Alternatively it can be viewed via the Art of Value blog, that also provides session notes at - http://artofvalue.com/journey-from-time-to-value-matthew-burgess/

The interview touches on many aspects of our experience, including:

1.  That value pricing is a journey, not a destination;
2. Case study examples of fixed pricing by professional services;
3. The importance of agreeing with a client a defined scope before commencing work;
4. That while fixed pricing may change your business, offering customers choices can change your life;
5. Exploring the cultural issues behind converting from a time billing firm (where the key focus is on what is ‘chargeable') to a timeless firm (where the key focus is on what is valuable).

Image credit: Nicki Mannix cc