Matthew Burgess is a lawyer who lost a customer when he sent an email at 4:30am on a Sunday. The customer said he wanted Matthew's best work not what remained after exhaustion. This incident started Matthew's quest to find a better way. For the last ten years, he has practicing value pricing at his own firm, View Legal. He shares why the switch is a journey instead of a destination.
Value Pricing as a Journey
- What is the most important thing you can share about pricing?
- Value pricing is a journey.
- Particularly in legal and accounting, a lot of the specialists are trying to understand that if you do enough work, you will get to the answer of how to value price.
- Why is value pricing a journey, not a destination?
- There is not an answer to value pricing; it is a practice.
- The transition can go from fixed price and hope, to abolishing time sheets to truly value pricing.
- Value pricing can be life changing.
- How did becoming a “firm of the future” change your life?
- Matthew's first success was his ability to fill in a time sheet well at his law firm.
- The Firm of the Future was a book he found for a presentation at the annual partners' retreat.
- He lost a customer because he emailed him at 4:30am on a Sunday morning.
- The customer wanted him to think strategically, not to be worn out all the time.
- He tried to persuade his current firm to switch to a value pricing model.
- The organization was not aligned and so he started his own firm.
Switching to Value Pricing
- What is a reasonable timeframe to switch to value pricing?
- It depends on the personal journey of the decision makers in the firm.
- In an accounting firm, 10 partners decided on a Friday to abolish time sheets and convert to value pricing. They started Monday with no time sheets. It took a year to deal with the issues from it, but they jumped in feet first.
- In a small legal firm, they are still filling in time sheets so they know their costs, but they are trying to value price. They wanted to pay Matthew's firm to price each project.
- If you haven't abandoned the time sheet, you haven't embraced value pricing at all.
- Under a time billing model, it is about the time recorded.
- Under a value pricing model, it is all about the value that is created.
- How do you scope and price for uncertainty in the legal field?
- Mergers and acquisitions are identical to how you should price litigation.
- Scoping on a regular basis is necessary, breaking up the work in smaller increments.
- It is a risk assessment.
- Always offer different tiers of how the customer can engage you.
- You can include access as one of the tiers.
- Going from value pricing to giving options has made a big impact on Matthew's business.
- He offers pricing using the concentric circle theory.
- The options must reflect what is important to the customer.
- What is the value of having someone review a proposal who is completely objective?
- The biggest impact pricing well is self-esteem.
- An objective party can understand when you are undervaluing what you are selling.
- You need to speak with your spouse, your personal assistant, anyone who can provide an objective opinion. Create a pricing council.
Having a Value Conversation
- What is one of your favorite questions to ask during a value conversation?
- What is it that keeps you awake at night?
- And then keep asking why – five times.
- Do you insist on having direct access to the decision maker?
- He tries to and pushes it.
- The times where he doesn't take a strong stand on that, it ends poorly.
- It requires courage to stand up and push to speak to the correct person.
- What is one of your best stories about creating value for a customer?
- In his book, there is a story where he saved the customer $50 million in tax with just a couple of hours of work, when he was billing by the hour.
- An issue was sorted out over 6 months, and he asked the customer what it was worth to him. The customer gave a price that was 25% higher than what was on the clock.
About Matthew Burgess
Matthew Burgess spent 18 years at a commercial law firm in Australia before setting out on his own to found a “timeless” law firm. View Legal specializes in wealth planning for business owners. He has written a book, The Dream Enabler. He also is part of the VeraSage community.
- Firm Website: View Legal
- Matthew's Website: MatthewBurgess.com.au
- Matthew on Twitter: @MatthewWBurgess
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