Peter Carayiannis started his legal career with a national law firm in Canada. Later, while working as a solo attorney, he discovered his niche, general business counsel to corporations. Peter then founded Conduit Law, which has become Deloitte Conduit Law, an affiliate of Deloitte. Among his unique qualifications, he is licensed to practice law in the United States and Canada.
Switching to Value Pricing
What is the most important thing you can share about pricing?
It is not that hard. Clients do not hire a lawyer to buy time (hours). They are seeking a solution to a problem.
How did you first realize the billable hour was not the way to operate your business?
Peter had early success with entrepreneurial clients. He realized his customers might not call when they should because the clock was running. When he discovered fixed fees, he realized it would encourage his clients to talk to him more frequently.
How did your existing customers react when you said you wanted to change how you were doing business?
They welcomed it with enthusiasm and questions about how it would work. Peter was candid with his clients. They had a conversation about what the client wanted to achieve and selected a number based on experience. Then they met in 90 days to review and adjust as necessary.
What metrics do you use to track progress and success with your clients?
The metrics are tailored to the client and the nature of the work. For example, if Conduit Law is helping the sales function, they will track how many contracts and the total revenue they supported in a quarter to help the sales team close business.
Succeeding with Value Pricing
Does value pricing work in a traditional law practice, where lawyers are working primarily offsite?
Yes, for example, Valorem Law in Chicago does value pricing for corporate litigation. In Peter's business, the first tier of pricing is for what he calls “run the company” work. It is consistent, repeating business. The second tier is per piece work, a set price each time a certain event happens. His goal is to provide budget certainty and pricing transparency for his customer.
Do you use options when you sit down with a customer to price the next quarter?
Yes, for example, the level of access. Should the lawyer be available 24 x 7, or business days 9am-5pm? Does the customer need a longer or shorter turn-around time?
What is the Client Value Adjustment?
It is a statement at the bottom of the invoice that invites the client to adjust the invoice, up or down, to reflect the value created. It has only be exercised by Peter's clients four times, three of which were an increase. (He credits Patrick Lamb of Valorem Law with the idea.)
What do you think is the future of value pricing in the legal field?
It is a client-driven movement. Furthermore, it in the early-adoption phase. However, if more graduating law students will challenge the billable hour, it will slowly create the momentum necessary.
What is one of your best stories about creating value for a customer?
Conduit Law was invited by a financial institution to bid on a short-term project. The client was unsure of the exact scope but had a hard deadline for the outcome. The client asked Peter to include an incentive plan.
Peter offered the client one fee for a simple matter and a higher fee for a complex matter. The client had the authority to decide what was a simple or complex matter.
Peter also offered a bonus plan. The client could increase or decrease the total budget by 20% at the end of the project, solely on factors like timeliness, responsiveness, and quality. Conduit Law won the business and received the full bonus.