Impact Pricing How Should a Law Firm Approach Pricing Strategy with John Chisholm
John Chisholm was a US lawyer. For 15 years, he's been in law firms, using value-based pricing, and now subscription pricing. John swims in the ocean every morning with his Speedo around his neck.
Pricing for law firms or even major consultancy firms is not easy. Price your final client contracts too high, and you'll lose some of your most high-value clients. Price them too low, and you'll be forced to work too few staff to the bone to cut costs.
In this episode, John shares how law firm should approach their pricing strategy.
Why you have to check out today's podcast:
- Discover how to create a pricing revenue model that funds a thriving firm while generating real value for clients
- Learn how to make your law firm and consultancy clients understand the value of your service and the risks they are avoiding by hiring you compared to your competitors by communicating the value you provide
- Discover why a pricing expert is essential to the profitability of any law firm
"Just don't price your own work."
– John Chisholm
Topics Covered:
01:06 – How John got into pricing: His late father's story in relation to legal service fees
03:06 – Doing timesheet free billing as a law firm in the 1970s to '80s
05:25 – The old law business model of billing by the hour
06:38 – How things led him to his aha moment in relation to the practice of pricing
10:37 – Changing the mindset around pricing: Possible or not?
15:48 – "The true indication of a really good professional is not so much the answers they give; it's the questions they ask"
19:24 – Having a value conversation around $500 vs. $270's worth
22:15 – John's pricing advice
23:31 – Pricing table topics: "Sunk costs don't matter to pricing or any business decision"
Key Takeaways:
"Now it's very, very ingrained – the whole profession, I'm afraid. There has been a lot of movement, but they've been mainly in smaller, innovative firms. But the large firms, despite what they say, when you peel back the onion, the measurements, their rewards, their whole internal systems still work around time, and it's hard to change, and they're very successful." – John Chisholm
"I know I'll get into trouble for saying this, but lawyers buying and selling to each other is not a great recipe for innovation or change or taking risk." – John Chisholm
"Those that perceive they have the most to lose will be the last to change, and that will be the big end of town worldwide." – John Chisholm
"I try and get the lawyers that I work with my clients to stop thinking like lawyers, because often, the solution is not a legal solution; it really isn't, or the objectives are not a legal solution. It may be that what we're going to do has legal input, and that's the skills that the lawyers have that someone else doesn't have. But it's turning the conversation on its head. It's asking the right questions. And I think the true indication of a really good professional is not so much the answers they give; it's the questions they ask." – John Chisholm
"I work more with my client lawyers focusing on what additional benefits can you give to clients, many of which don't cost anything to the law firm but add value to the client; the price just follows. I think also, if you can focus on increasing the client's profit, our profit will follow as a profession." – John Chisholm
"I think even though it might be for short term profitability, there's just so many good lawyers that just do underestimate the value that they're providing to their clients, and that's their fault, not their client's fault." – John Chisholm
People / Resources Mentioned:
- Ron Baker: https://www.linkedin.com/in/ronbaker1/
- VeraSage Institute: https://www.verasage.com/
- John Chisholm Consulting: https://www.chisconsult.com/
Connect with John Chisholm:
- Email: john@chisconsult.com
- Website: https://www.chisconsult.com/
- LinkedIn: https://www.linkedin.com/in/chisholmjohn/
Connect with Mark Stiving:
- LinkedIn: https://www.linkedin.com/in/stiving/
- Email: mark@impactpricing.com