Victoria:
Welcome to another episode of The Boss Boss podcast where we delve into the minds of some of the most innovative and forward thinking leaders in the b2b and professional services world. Today we have the privilege of hosting a distinguished guest, whose multifaceted career spans the realms of law, business and mediation. I’m thrilled to introduce Sean Jardine, a seasoned solicitor and accomplished partner at a law firm and a skilled mediator. Sean’s diverse experience in the legal field, combined with his role as a commercial director, has given him a unique perspective on the intricacies of the legal profession and the evolving needs of clients within the space. But what truly sets Shawn apart is his pioneering approach to legal billing is the author of the revolutionary new book, ditch the billable hour, where he challenges their traditional billing system in legal services, and proposes a transformative shift towards value based pricing. His book is not just a critique of existing practices, but also a practical guide, replete with insights and strategies aimed at revolutionising how legal services are priced and delivered. In today’s conversation, we’ll explore Shawn’s journey to becoming an author, as well as delving into practices within the book, and how he came about to be such an advocate for value based pricing. So whether you’re a law firm leader, a practising attorney, or just someone interested in the business of law, or any professional services, for that matter, this is an episode that you won’t want to miss. Shaun, thank you so much for joining me today.
Shaun Jardine:
Victoria, I’m delighted to be here. Thank you very much for the invitation.
Victoria:
So before we delve into the transformative ideas you’ve presented in ditch the billable hour, I’d
love to start by asking you about your experience as an author. Writing a book is obviously a significant undertaking, especially one that challenges entrenched industry norms. Is this your first dive into authorship? And how did you feel to transition from your roles as a solicitor, mediator and commercial director to taking on the mantle of an author? And could you share with us what inspired you to put pen to paper? And how this journey of authorship has impacted your perspective on the legal profession?
Shaun Jardine:
Whoa, good question. Good question. It’s my first book. Probably my last one. But anyways, my first one. I’ve written lots of articles and blogs and things like that over the years. But the book, I started writing it because people said, You ought to write a book about this, because there is a book about implementing value based pricing in legal. And I was working with law firms, helping them on their on their journey. And you know, a number of people kept saying, “Oh, you ought to write a book about this.” And then I read a white paper from a legal technology company, where it was one of these beautifully crafted white papers that people have interviewing eight lawyers. And of the eight lawyers all over the world, six said we hate the billable hour. We just hate it. We don’t like living our lives in six minute units. There was one person who said I don’t mind too much. And there was one person who said no, I like it. And clients like it. And the other six who said they hate it, they just said we don’t like it, but it’s too hard to change it. And that kind of was a bit of a red rag to a bull where I thought that’s not a reason, just because something’s hard. There’s not a reason to carry on your career. And so, in 2017, I was fortunate enough to go out to America to a pricing conference. And they had their lawyers from all over the world, New Zealand, Australia, America, Canada. I was the only Brit. I was the only Brit in a 100 strong conference of people. And there were lawyers who were doing this doing this value based pricing. And I just thought, “This is amazing.” What a way to run a business not living our lives in six minute units. So I came back carried on reading, carried on exploring, kept in touch with as many of those lawyers that I could. So I said how do you do this? How do you do that? What do you do this? What do you tell me about this? And so I was just that annoying little person asking the millions of questions all the time, and people would be very, very generous with their time. And then I rolled out in it as a pilot at my firm and and then when I turned 60 I thought you know I’ve I’ve enjoyed my legal career. But I’d quite like to do this consulting. And that’s one of the reasons why I ended up writing writing the book. But so really to answer your question in a nutshell, why did I write the book because someone wrote a white paper and said, It’s too hard. That was it.
Victoria:
You taught some interesting points there. I’m quite fascinated at the the point that you made about when you went to the conference, and you were the only Brit, and everyone else seemed to have this idea of value based pricing. And it seems like we’re a bit behind the times there.
Which in some ways, surprises me in other ways doesn’t. Is there anything that you can think of, that may have been the reason why British law firms were slightly behind others around the world in doing so?
Shaun Jardine:
I think I think it’s a problem with all lawyers, we’re naturally conservative, we dislike change,
we’re risk averse, we pay attention to the detail. And you know, as long as the hourly rate exists, some people say, “Well, that’s the model. That’s what I was taught on it”. So okay. Now, I was reading a report today, where some of the largest law firms in the world, their partners earning 7.5 million a year, right? So it’s hard to tell a roomful of millionaires, your business model might be wrong. Now, not all law law firms. So law firms, pardon me, especially earning
7.5 million pounds a year. That isn’t a global law firm. So it’s hard to, you know, look at the business model and say you’re wrong. But actually, if you look at it from a client’s perspective, and every lawyer I ever speak to, and every firm I ever worked with, I asked the same question of all the lawyers. If you’re having an extension built on your house, and having a two up two down extension, would you pay the builder and all the subcontractors on a day rate base? And the answer is no, they look at you as though you’re mad. That’s what we ask clients to do every day. We just give them an hourly rate. And, and expect them to say, “Yeah, that’s fine”, because as soon as you give someone an hourly rate their attitude goes up, and they hear a number. And an American firm made the headlines, because their hourly rate for one of their partners is $2,500. So as soon as somebody says, I am an hourly rate, and my hourly rate is 300 pounds an hour, 350 pounds an hour, 400 pounds an hour. Client say, “Well, that’s a lot of money. How long is it going to take?” Now, if I say to you, as a client, I can help you with this with this problem, Victoria, I can give you three prices, I’ve given you a gold price, a silver price, a bronze price, these are the three prices, you choose which one you want. And you might be frightened by the total number, but at least you know what it is, in the same way that builder will give us a price. And they build in contingencies. They build in I’ll allow for a bit of bad weather. If I’m starting this in October, I’ll build in for the I won’t be on site. And so yeah, that’s, that’s really my take on that.
Victoria:
You’ve emphasised, obviously, the need for this paradigm shift in legal billing. And you mentioned the conference that opened your eyes to what was going on around the world and this idea of value based pricing. But were there any other key moments or revelations within your career that inspired you to challenge the billable hour model and begin advocating for value based pricing?
Shaun Jardine:
I figure it all comes back to the fact that you’re you know, as lawyers, you know your subject matter. If you came to me and I was a litigation lawyer, so lots of dispute resolution, and that’s, you know, how I got into mediation. But if I can give you the answer to a problem that saves you a million pounds if I can give you the answer that problem in 15 minutes. Is the right price. 1 quarter of my hourly rate. Is it 75 quid plus VAT? No, because you’ve saved a million pounds and I’ve charged you something that’s disproportionate. So lawyers would leave value on the table for that, where lawyers aren’t confident enough when it comes to asking for money, but they’ll leave value on the table and they then the other part of it is, if you think about the hourly rate and customers, the lawyers interest in the hourly rate is I want this to go on for as long as possible. The customer wants it, I want it on your hourly rate to be as short as possible. So we’re not aligned, the outcomes are not aligned. And with the hourly rate, the slowest horse wins the race. So if you’re a client, and you’re saying, Shawn, I want you to be my lawyer, I’m going to pay you an hourly rate. And I will always pay you for every hour you do. If I’m the
worst lawyer in the world, but I keep booking my hours and you keep paying them. I’m going to be the most profitable lawyer in the world. Because you’re going to carry on paying, there’s no incentive to be efficient. Yep.
Victoria:
Yeah, it seems counterintuitive to everything you’ve learned working in a business to be productive and be efficient and give the clients what they want, if you’re just trying to drag it out for as long as possible.
Shaun Jardine:
Absolutely. And now we think about generative AI and things being made slicker and easier, etc. Why would a law firm invest in AI? Yeah, because we don’t want to be more efficient on the billable hour, we want to be less efficient, I should be going back to fax machines, and have a secretary with shorthand, you know, that’s how we should be doing it. But you know the industry has got to change, our iceberg is melting, we’ve got to do something about it
Victoria:
I know, and it’s not the first time I’ve heard it. I’ve spoken to a few people in the industry over the last six months. And it seems to be this idea of everywhere else, there’s innovation in all other aspects of business growth and global growth and whatnot. It seems yeah, as I said, completely counterintuitive, that, lawyers are digging their heels in the sand and don’t want to don’t want to go forward with the innovation because of this fear of losing money or, or losing their ways. And I think the value based pricing model is it’s exactly what they need. But I can understand with the traditional people that are in law, and where it all comes from why so many people are quite hesitant to implement something like this at the start, before they know what it is. So I guess that’s such an important reason why they should read your book, because at first you hear it and as a lawyer, as you’ve already touched on, you think “Oh, no, I’m gonna get less money”. But it’s not the case at all. And if anything, they should be getting more money, because they’re giving the value to the services that they’re offering.
Shaun Jardine:
That’s the whole point, you can as a lawyer earn more money, because you’re not leaving on the value value on the table. You don’t have to work as hard you worked. You literally can work smarter, not harder. The clients are happier, because they’re not left with this open ended chequebook, you’ve given them three prices. And the time to find out that the client can’t afford your services is before you do the work. I want to find out you can’t pay at the beginning, not when I do the work and deliver you a bill and you say actually, I can’t pay. That’s bad for everybody. So it has a tremendous amounts of benefits. But the challenge and it’s certainly the challenge for law firm leaders is to say, Okay, we’ve got to make this change. We’ve got to look at it. And, you know, I think Gen AI will be instrumental in that. And lawyers. Well, lots of lawyers are looking at it. There’s a lot of bad press about certainly chat GPT because an American lawyer you may or may not have heard, put some cases in on a docket in New York
and chatGPT just made up some legal cases. And that’s a fascinating interview with the lawyers called Stephen Schwartz and there’s a great interview in the New York Times if any of your listeners want to read that it’s it’s cringe worthy. What he had to go through when the judge called him into court with an audience of 70 people sitting in the court and one commentator just described it as watching a car crash. But the thing is about just taking artificial intelligence. I did an event with Professor Richard Susskind, the back end of December. And the neural networks that drive AI are doubling in capability every three and a half months, doubling in capability every three and a half months. That means in five years time, they’re going to be 300,000 times better. And law, legal at the moment are investing millions, the big legal providers are investing millions in the tech. So it’s never going to be as bad as it is now. And the fact is, don’t use chat GPT for your legal research to sell me does this case exist? But you can ask chatGPT to create questions which might help you to solve a problem. And that can then provoke a lawyer’s grey matter to start thinking, well, I hadn’t thought of it that way. Let’s have a discussion, then you can come up with creative solutions. So that’s where I think I can really add value now, let alone legal publishers start actually rolling out walled gardens with all this knowledge in that walled garden. And that’s what we do our legal research in.
Victoria:
You’ve obviously mentioned you’ve touched on it there that it’s it’s a transformative approach. It changes sort of every aspect of how lawyers present their services and productising their services, I guess, can you delve deeper into how value based pricing fundamentally differs from their traditional billable hour model in fostering client-lawyer relationships, and aligning legal outcomes with client expectations? You have sort of touched on it there, but just want to go into it a bit deeper and find out? Is this matching up with sort of client expectations and legal outcomes more than the traditional billable hour?
Shaun Jardine:
Well, if we think about what clients want, in any client and any consumer environment, we want certainty about price. We don’t want any surprises. We want to know that we’ve got, you know, we want clarity, what are we getting? What are we not getting, and we want comfort that someone’s got our back, that we’re in the right place, and that we’re being looked after. And ultimately, it’s not linked to the time that back to the six minute unit or the quarter of an hour, it takes me to solve a problem. It’s linked to the service. And what I’m a great fan of is giving clients these price choices. And the same way we go to a car wash, you’re saying we get a wine lists, we choose what we want based and price is one of those factors. And if we’re going out for, you know, pub meal in the middle of the week, we might think, oh, kind of a bottle of the house white, that’d be fine. If we’re going out for a special anniversary dinner, we might say Oh, well, we will look at the finer wine list and things like that. And that’s the thing, value.
Working out what is valuable to people is complicated. Because value value is different to different people, okay? The amount that you will spend on a car and I will spend on a car is different, the amount that we’ll spend a wristwatch is different, you might be very much into fine wines, etc, etc. I might not be into that. Lawyers quite often say everybody wants to cheapest price. No, we don’t. Just look at our own lives. We don’t all shop in Primark, we don’t all drive around in, you know, the cheapest Korean car that we can possibly buy. We don’t all shop in the cheapest same supermarket, and we don’t all drink instant coffee. You know, we are all completely different guess what our clients are. And their attitude to how they want to
engage with lawyers is is exactly the same. And I worked with one law firm, and it was employment lawyer. They had a commercial client that wanted new employment contracts. And so the rule is no one price is their own work in isolation. And we’ve got to create three choices. So working with this employment lawyer, and the offer that went to the client was I will send you some employment law templates. You fill them in to your best ability, I’ll send you a few guidance notes. You fill him in to your best ability, I will check your homework two grand I can do like that, or I will do it for you in three weeks time. Five grand or I will drop everything. I will do it for you tomorrow. eight grand. The client chose the eight grand option because for them it was important for the business transaction that they were in to say no we really need this done quickly. Now, was it was the client happy? Yes. They got it tomorrow. They got it the day they wanted, they knew they could get it cheaper, because we told them, they’re gonna get cheaper with the same lawyer. Was the lawyer happy? Absolutely. I’m gonna do half my target tomorrow for the month. Marvellous. And was the equity partners of that firm? Were they happy? Well, I certainly hope they were. Because that was an example of a lawyer making more money on one transaction than ordinarily you would have done if you just build it by the hour. So it’s, it’s that kind of mindset change, where lawyers have to think, what is important to the customer? When that client knocks on the door and says, I want you to help me with this conveyancing transaction? Are the clients when they do conveyancing? Are they really interested in the minutiae of the mortgage deed? The contract the searches the replies to preliminary inquiries, and any indemnities? Are they really interested in that? No, not at all.
What they’re interested in is, Can you move us in on Friday, the 28th of March because the kids start school the following day. That’s what’s important to them. Yet when we’re engaging with clients, do we ever talk about that kind of stuff? No. And that’s why in the book you will have seen, I talk about having structured conversations and training people. Whereas if you were ringing me up for conveyancing, and I’m going to say oh, you’re moving up to Blockson, which is a little village up the road, you’ll love that there. The primary school was having a new hall built and the pup was just having the refurb in the dining room. And I talk to you about all this other stuff. You’re gonna think Oh, Sean’s a nice bloke. I’d like him to do my conveyancing. And if I’m 500 quid more than the other firm that you might have got a quote from you’ll think “No, I like Shawn, because he talks about the primary school and he listens about how important is that we get the kids in or whatever it might be. I trust him, because he showed an interest in me.” And that’s what we’ve got to start doing showing an interest in clients. And as soon as we do that, we know in every when we go to a pub or a restaurant, and if you go to a restaurant and a restaurant, you’ve been in before, they say, hi, Victoria, how are you? And they know your name, you think? Oh, good. So we’ve got to start doing? Yeah,
Victoria:
definitely. I think if anything, having more transparency, – and the underlying factor of it all is transparency – for both the lawyers and their clients, as you said, and who doesn’t want that. And that can only help foster these client lawyer relationships even more and, and allow you to find out from the client, what is of value to them, and what does value look like to them? It’s really interesting. It’s something that I’ve heard a bit about before, but just having the conversation with you is, obviously it’s easy for me to say because I’m not a lawyer and I’m not a partner at a law firm but for me, it’s like well, why hasn’t this been a thing the whole time?
Shaun Jardine:
But you and everybody listening to this are consumer of services. And I’ll give you one example
of how value is a feeling okay? Fairtrade bananas, I mentioned these in the book right, big industry of Fairtrade bananas. Why do people buy Fairtrade bananas? They’re more expensive than the other ones. They’re usually smaller. And why do we buy them? Because it makes us feel good. We’re helping. We’re helping a farmer somewhere. Now, maybe it’s just me, I never read the packaging that close to that I know where the farm is, or even what country it’s from. But I’ll always buy Fairtrade. I don’t know why it costs me more. I’m doing my bit. Value is a feeling. And it’s a feeling that can be banana shaped. I’ve just made that up. There we are. It but that’s, that’s an example of how how we buy things. It doesn’t appear logical all the time. Think about the price of water. The amount of the amount you pay for a price of water for a glass of water in your house is minuscule. The amount you pay for a price of water in a high end restaurant. Could be a couple of quid, effectively a couple of quid for a glass. It’s the same product is h2o. It is exactly the same, but context where you’re buying it where you’re consuming it changes and that’s the same in legal. You want to charge a high price, look high end, provide that high end service say Hi Victoria, when you walk in the front door, you know that’s that’s important.
Victoria:
Exactly. And you discuss in the book the various challenges and in transitioning to value based pricing, could you expand on these a bit just for the listeners that haven’t sort of read the book yet, perhaps sharing a few insights or anecdotes from your professional journey in implementing this, this system and maybe suggest a few tips or strategies for law firms to effectively navigate the transition.
Shaun Jardine:
Okay, one of the the biggest challenge, first of all is leaders leading, you have to if you want to implement value based pricing, this is a strategic change in how you’re going to do something in your business. So the leaders have got to lead, you’ve then got to create a little pioneer group of penguins, Pioneer group penguins, these, I have something called the eight key point plan. First one is paradigm shift, we’ve got to do something, the leaders have got to leave that paradigm shift, we’ve then got to get our pilot group together a little enthusiastic group of penguins who want to try this, who are going to embrace it, who were going to get involved in this. And these are the ones that are going to be enthusiastic. Now in the organisation, we will have no no penguins, people who are bigger Oh, no, no, no, that’s not going to work here. You keep your no no penguins out of your pioneer group, we will take on board what they’re saying later on. And we’ll listen to them later on. Because they’ve got to be heard, and they might actually have some good points, but they’re not going to be part of the pioneering group. So that’s quite important. And then we’ve got to create this shared vision, what is it going to look like? What is what is our firm gonna look like in a year’s time, two years time when we’ve rolled out this value based pricing project. And it’s, it’s, it’s working. So that’s, if you like some of the challenges, and because it’s a change management programme. Everybody knows change management changing, you know, turning around a tanker takes time. So it is not what I call a John Luke Picard syndrome matter where the CEO sends out an email and says, someone make this. So make it happen. It’s, it’s a team effort, everybody’s got to be in board. And then what we’ve got to do, I briefly mentioned this, it’s about confidence, because it’s for hourly billing, to work out hourly billing, and be good at hourly billing, you need a calculator, just multiply the hours by the number. That’s it. For value based pricing, you need courage, you need courage to
ask and design a figure because you will never get that pomp fist price that makes you go yeah, you will never get that unless you ask for it. And then what the next challenge for the leaders is, well, we’ve got to make a psychologically safe space for our Pioneer penguins, because if we’re going to start asking for what might seem to be the 2000 5000 8000 figures, we’ve got to make sure that if that if that client said I don’t want any of those, and I’m going to go and I’m going to leave, and we couldn’t turn them round, then that cannot be a career limiting event for the Pioneer penguin that tried that. And lawyers such as very bad about having blame cultures in environments. And we’ve got to address that and say anybody who’s part of this group is is going to be protected. And we want to we want them to embrace it. And I was working with one firm, where they had their wills, trust and probate team on a zoom call.
And there were about 10 or 12 people on this call, I was saying, Look, we Brits what we’ve got to do, we’ve just got to get over the fear that we have about talking about money. And this lady in the top right hand corner, young lady, she piped up said, I have no problems talking about money. In fact, she said, I’ve been here two months, I think we charge too little, I was charging more at my old firm. And she said and the reason why I don’t think I have any problems talking about money is I’m Polish. And it was that that moment there that you can imagine 11 heads all turning up to the top left hand corner of the Zoom screens thinking, hang on, this is one of our own talking about this. It’s been in our team, a saying we think we’re too cheap and be having no problem talking about wanting to charge double than what they currently charging. And that is, again, that was a real pioneer penguin there who you know have recently joined the firm, we got straight into the Pioneer group. And, you know, your leaders and your leadership can come from anywhere in your organisation doesn’t necessarily have to be the person who’s wearing a badge with partner written on it. If the leadership example came from someone who had been with the firm for two months, and leaders recognise that as part of the change
Victoria:
Yeah, it’s interesting because it is such a British thing to not like talking about money. And, and in some ways I can’t work out whether it’s this ego thing, or whether it’s a complete lack of ego thing and lack of confidence thing. And somehow every time I have the conversation, I seem to land somewhere in the middle. But it’s so fascinating to hear, I’ve never heard it in the sense of billable hours and law firms and how much they’re charging. So although I’m not pleased to hear it’s like a universal sort of thing. And across multiple different industries. I can’t say I’m surprised and anyway. So considering the scepticism that surrounds moving away from their billable hour, as mentioned in your book, what evidence based arguments or compelling insights would you offer to law firm Leazes, hesitant about embracing value based pricing?
Shaun Jardine:
First of all, Gen AI, think about that, because of the moment the courts, I know that the Legal Services Board, talking about having a conference in in March of this year, where they’re going to say, well, there’s got to be transparency about firms using Gen a AI products. And you’re not going to be able to do if you’re billing by the hour, you can’t actually say, Well, I use Gen AI, and what took me 20 hours before, I’m still going to charge you 20 hours for all, if your billable hour, if you say that you’re going to build by the hour bill by the hour, all of a sudden, you’ve lost 20 hours work for six minutes of Gen AI. And in California, they’ve issued a practice direction a couple of weeks ago, which talks about, you cannot charge the same amount that you would have done for this work, if it’s been created by Gen AI. Now. So what we need to do
is have a different retainer with our clients where we say we don’t charge by the hour anymore, we provide you services, we use technology, and we will provide you services for fixed prices. How we get there isn’t ultimately any, any business of the client. If you think about our cars we drive. We don’t know how many hours it took to build the cars we drive, we’ve never considered it anymore. And it’s irrelevant. We buy the cars that we like, because those are the cars we like. So we’ve got that Gen AI is for leaders. The second thing is ask your lawyers if they like living their life in six minute units. The answer is they don’t. The answer is that there you look at your own management information. And you’ll look at things called utilisation rates were your thing. Ah, this lawyer Victoria, she’s not doing very much work. She only does two chargeable hours a day. But she’s here for eight hours a day. Does she spend the rest of her time just chatting? And the answer is, No, you don’t because you’re working throughout those eight hours. But you don’t put all the work down that you’re doing. Sometimes you think, oh, I should have done it a bit quicker. Maybe I’ll discount it myself. And I remember going into one firm, and the managing partner said, Shaun, we have a problem with utilisation in our teams.
We’ve got some teams where the lawyers don’t really work very hard. I said, are the leaders of those teams are the leaders of those teams, if I had to go to them as a young lawyer and say, I need to write off 1000 pounds worth of time here, because I’ve done the work, but we gave a price of 2000 pounds. However, I’ve got a 3000 pounds work in progress bill, I need to write off 1000 pounds. I said are the leaders of those teams, the kind of people who will give their team member a hard time when it comes to a write off. This managing partner says yeah, I think you’ve got a point there, Shaun. I said, Well, we’ve just solved your utilisation problem, haven’t we? Because your lawyers are frightened to put down the real amount of time. Because they know they’re gonna get told off further down the line. So if it’s a question of actually, where is this stick gonna beat me? It may as well beat me because I do three hours a day and they think I chatter. And Isn’t that sad? Because we’re in an environment where I don’t feel I can go to my boss and say, well, I need to write off the amount of time here. And the reason is, because and then talk about why it might be. We’re just very inefficient. It might be we don’t price very well. And I used to track at my firm, I used to have some quite decent software that would track things. So for example, if you take a shareholders agreement, every business should have a shareholders agreement. I could ask the system give me the prices for the last 20 shareholders agreement we’ve done and we’d say the average price charge was 3000 pounds. I then say what was the average write off? Oh, the average write off was 1000 pounds. Okay, so when we’re pricing our next shareholders agreement, let’s have our base figure as 4000 pounds.
Because we know the average price is three, and we know the average write off is 1000. So let’s start at 4000 pounds. And then if we did, taking the employment law example, we might say, we could do it for you in X many weeks time 4000, we could do it for you in three weeks time 6000 We’re doing for you tomorrow 8000. Plant wants it tomorrow, happy days. But we know that 8000 We’ve doubled the rate of our old base rate. But we also know that our base rate of 4000 pounds was still better than what we’re used to charge. Because we had accurate data. And accurate data is important. And, you know, and anyone who always challenges me about time recording will say, Yeah, we need to know the cost of what we’re doing. And I’ll agree with them, you do need to know the cost of what you’re doing. But that cost of what you’re doing the time should not automatically be the price, because otherwise, we’re back to our saviour million pounds for 15 minutes, and the price is a quarter of my hourly rates. It’s all about the value.
Victoria:
It’s all about the value. And finally, what are the central messages or key takeaways that you hope readers, especially those in the legal profession will glean from the book.
Shaun Jardine:
Okay. If you read the book, The I can save you a three hour read of a McKinsey publication pricing book, The what I’ll give you three takeaways. The first is, if you want to make more profit in your business, the easiest way to impact profit is by putting your price up. There we are saved every one to three hour read of a McKinsey textbook. So put your prices up. The second takeaway is no one should be able to give a price without a second pair of eyes on it. Because if Victoria, if you’re a lawyer doing work, and you’ve got to come to me with a price for your client, I’m going to be far more bullish about the price you should charge the new will be because you’re the one thinking I’ve got to have that conversation with the client. But I will be challenging say, Well, look, this is really quite complicated, isn’t it? And you’ll be saying yeah, is actually and Victor, aren’t you? Aren’t you very busy at the moment? Yeah, I am quite busy at the moment. Okay. So, Victoria, what is this client like they’ve been? Have they been good to deal with up until now? You might say, Oh, no, they’ve actually been quite difficult to deal with up until now. And obviously, well, I don’t think you should do it at the base costs that we’ve identified them. And and if you’re we operate our psychologically safe area where you can go in for what might, you might originally have been thinking 4000. And then you might say, well, I’ll give a price of 6000. If you get the 6000, happy days, you’re happy. If you don’t get it, it doesn’t matter. That because, you know, lawyers do not need every bit of work that comes into their organisation. They need more than their fair share of the good stuff. And if there is one question that I would ask all of your law firm listeners to ask themselves, it would be when a new starter, joins your firm, and joins your team. How is the pricing induction carried out? And I’ve surveyed over 164 firms? And the answer to this question, the the the the most common answer to the question, How is pricing induction carried out in your team is it’s not? It doesn’t happen. And if you want to make more money, why not have a little pricing induction process? Why don’t talk to people about the prices you charge and why and encourage your people to embrace value based pricing. So those are my takeaway. Yeah,
Victoria:
it’s all it’s just it’s educating everyone, everyone in the company, all of your clients, it’s being transparent. And yeah, that brings us back to the point about British people don’t like to talk about money. But it’s so important in growing a business and especially as you’ve said, new people coming into the law firms. These are, especially with the younger people and people that have just sort of graduated with their law degrees and stuff. These are the people that are going to be running the law firms in 40 years. These are the people that you need to have these conversations with.
Shaun Jardine:
Absolutely. You hit it on you’ve hit that nail so one of the head because it is so important. And that and that we permit, one of the peas in the 8P point plan is permit where we allow people to understand the process, try it and give it a go, because that’s the important thing. And once once we find that we start giving it to go and we’re successful, our confidence grows, I can tell you just if it helps, like have finished with one firm, I worked with the residential conveyancing team had 15 lawyers in it. And I asked them the same question. You’re selling a property, it’s
registered land, they’re selling it for 650,000 pounds, it’s jointly owned, there is no mortgage, what is the price that you will charge? And I do these anonymous surveys for people before I go in and do the training day. So I have 15 lawyers responding to this question. I’ll ask you, Victoria, how many individual prices Did you think I get for the ones problem? How many different prices 15. Bang on Yep. And the range of these price range went for this conveyancing transaction 1650 at the bottom to five and a half 1000 at the top, from the same firm. Now, actually was able to say to them, let’s have a conversation about how we arrived at our prices. Let’s scrunch them all together. And one of the partners there said, Well, you know, he was quite defensive, a bit of a no, no Penguin, I think. And he was he was like, I’m the partner, I my clients will pay five and a half 1000 pounds because I’m a partner. And I said, that’s fine and brilliant. Well done, you forgetting that rate. But your clients don’t care about the status of the person doing the work. Because it could have been a legal executive, or newly qualified solicitor at the other end of the spectrum, doing it for 1650, who now knows, well, I can charge more. And what happened in that firm was the the range dramatically went up from the bottom towards the top. And within a month, they’re making more money. Lawyers have not having to work harder. They’re just working smarter. Exactly.
Victoria:
Shaun, thank you for sharing your invaluable knowledge and insights.
Shaun Jardine:
Thank you for having me. I’ve really enjoyed it.
Victoria:
And that brings us to the end of an incredibly insightful episode of boss the boss. Huge thank you to Shaun for joining us today and sharing his invaluable perspectives and experiences. For our listeners Shaun’s insights into value based pricing and his vision for the future of legal billing, and not just thought provoking but also a call to action for transforming how legal services are valued and delivered. Remember, you can find Shaun’s book, “Ditch the Billable Hour” for a deeper dive into his revolutionary approach to legal billing. It’s a must read for anyone in the legal profession or anyone interested in the business dynamics of professional services. Thank you all for listening. Don’t forget to subscribe to our podcast for more conversations with leaders in the B2B and professional services world.
