No More Billable Hours: The Move To Value-Based, Results-Based Pricing

Episode Notes

Transcript

Announcer:

Managing your law practice can be challenging, marketing, time management, attracting clients, and all the things besides the cases that you need to do that aren’t billable. Welcome to this edition of the Unbillable Hour, the Law Practice Advisory podcast. This is where you’ll get the information you need from expert guests and host Christopher Anderson here on Legal Talk Network.

Christopher T. Anderson:

Welcome to the Unbillable Hour. I am your host Christopher Anderson, and today’s episode is about acquisition, which everybody gets excited when we get back to acquisition, but we’re not going to talk about marketing today. Not really. It’s going to be from a different angle about acquisition, but I think really this one is very near and dear to my heart because this is about positioning the value of your firm to your potential clients. We haven’t really discussed pricing models much on the show to date, but it’s an area that I’ve actually put into practice myself. It’s an area that is really ripe for improvement. One might say disruption and again, very important to me and I think it’s a topic if you’re listening in the background or half listening, like perk up your ears. This is one to pay attention to. And if you will recall the main triangle of what it is that a law firm business must do, we’ve got to acquire new clients and in acquiring new clients, what we’re going to talk about today is how to position the value of your firm.

Then of course, we’ve got to produce the results that you promised that’s production and achieve the business and professional results for you. The owner who is also the person in the center of that triangle driving it all for better or worse. Today, like I said, we’re going to talk about value-based pricing and more generally new and disruptive ways to think about pricing models for your firm. My guest today is Shaun Jardine. He is the director of Big Yellow Penguin and his introduction today, which he sent to me, but I think it’s a really cool one. So Shaun is unashamedly and unapologetically a disruptor, and we’re going to ask him what he means by that. He comes to it honestly as a former litigation lawyer, a former law firm, CEO and owner of a UK top two 50 law firm with over 230 people under his charge.

His insight into what makes law firms tick comes from the real world. Shaun retired in 2021 from private practice and founded Big Yellow Penguin in 2021 with the aim of encouraging and helping lawyers and law firms to move on from the 20th century and adopt practices including value-based pricing, which will make their futures more secure financially and operationally and perhaps enjoy their practice a little bit. Once again, Shaun’s also written a book Ditch the Billable Hour, which sets out how law firms can implement value-based published January of 2024. And last, but certainly not least, and least for my curiosity, Shaun is the legal guardian of Declan who is an inflatable penguin and I’m going to guess he’s big and yellow, but maybe not. Shaun, welcome to the show.

Shaun Jardine:

Christopher. Thank you very much. I’m delighted to be here.

Christopher T. Anderson:

So first of all is Declan big and yellow?

Shaun Jardine:

Declan is just a small inflatable penguin actually.

Christopher T. Anderson:

Oh,

Shaun Jardine:

He’s not too big. And the penguin thing is kind of a metaphor for change. I’m a great fan of John Kocher, the Harvard Business School who wrote a book called Our Iceberg is Melting, which is a lovely fable about penguins. If we don’t change, they die. And so I thought, well, I read that book, I had a big change management project when I was in my law firm and yellow penguins do exist, but they’re quite rare. I happen to be six foot four. So when it came to setting up a consultancy, I originally set up like most lawyers do when they set up consultancy, I set up Shaun Jardine Limited. When the certificate came through from the company registration office, I thought, this is so boring, I was going to have to kill myself. And so I then paid 20 pounds and they’d changed their name to Big Yellow Penguin and people always, it is a good conversation open up because they say why you called that. And I’ve only addressed three legal conferences dressed as a penguin, one of actually was in the US So there you go. Many years ago.

Christopher T. Anderson:

And just for the record everybody, since this is a podcast, Shaun is wearing a yellow shirt today, so

Shaun Jardine:

Got to be your brag, Christopher. Got to be your brag.

Christopher T. Anderson:

Alright, so let’s, tell us about you though. So coming out of a larger law firm going into consultancy as many do, but you took a very specific angle. So what brought you to be interested in value-based pricing as a subject that you wanted to put out there in the world and make a difference in?

Shaun Jardine:

Well, I’m going to blame an American actually. Well, I’m going to blame an Australian and an American. So I got friendly through LinkedIn with an Australian guy called John Chisholm who does a lot of value-based pricing. And he came over to the uk, we had dinner once and then I ran a seminar and he came to that and I invited other law firms to that and John kept badgering me saying, look, there’s an event going on in Allen outside Dallas in Texas. He said, you’ve got to come to this event, it’s being put on. And Ron Baker is speaking at this event. And so I thought, okay, so that was in 2017. I went out to Dallas, went to this conference. There were two conferences back to back, but all about pricing. And I met, there were about a hundred people there and I met lawyers from all over the world, but I was the only Brit. What was fascinating was I was meeting people from Canada, Australia, New Zealand, all of whom were doing this, and I thought, look, I quite like this idea of not being wedded to time sheets and extracting more value, more money for the value we lawyers create. So I kept in touch with everybody that I met, some great people and over the years I had more conversations. And then I was CEO of my law firm. I got elected for three years, but I did four years, nine months, 11 days. Not that I was counting or anything.

Christopher T. Anderson:

You got extra time for bad behavior.

Shaun Jardine:

Yes, absolutely. And I was, my swan song was rolling out a pilot project of value-based pricing with three legal teams and I really enjoyed that and I was able to put everything I’d learned into practice. I was still chatting to lawyers all over the world. And then when I retired from private practice, I thought I really, really enjoyed that as a project. I’d like to do more of it. And that’s really how the big Yellow Penguin came about. That’s what I’ve been doing and I’ve been fortunate enough to work with now firms all over the world, so I’m really enjoying it.

Christopher T. Anderson:

Excellent. So yeah, there are, I guess since you went to this conference on pricing methods, there’s many debt people use. So some firms do some product-based billing, some firms just do flat fee, the hourly bill is still alive and well, can we just talk a little bit about what, let’s define value-based pricing from your perspective, so we know what we’re talking about here. What does value-based pricing mean when you’re discussing

Shaun Jardine:

It? Okay, my definition of value-based pricing is just a price that is fair to the lawyer who has created the value of doing the task or the work for the client and fair to the client. But it is not a measurement of time. It’s not the six minute units. And I always talk about the, we all know the old story of a factory that ground to a halt. The engineers couldn’t get the factory work in production line had ground to a halt and they got the old engineer out of the village and the old engineer came up the hill into the factory and he had a little listen to the machine and he took out his hammer and he tapped the machine and the machine started running and then he sent in a bill for a thousand pounds and the factory owner said, this is ridiculous, get me a breakdown of the bill.

And the old engineer sent in a bill that was cost of hammer, two pounds knowing where to tap 998 pounds. Now everybody’s heard a story of something along those lines, but I didn’t find out probably until about nine, 10 months ago. That’s not a fable, that’s a true story. And it was Charles Steinmetz who was an electrical engineer, another American, the factory, Henry Ford’s ground to a halt and Stein spent two days in the factory listening. He was an electrical engineer listening to the machines and he stayed there overnight and in the end he put, it wasn’t a hammer, it was a bit of chalk. He put two chalk marks on two machines said to Ford’s engineers, those are the ones that the electrical coils need replacing in. And he was right and production started, he said to Bill to Henry Ford, Henry Ford said, get me a breakdown of that bill. And it was cost of chalk, I dunno, $1 or whatever it was, and knowing where to put the chalk marks and that was back in the fifties. So I always think that that’s a great, a true story. It’s a great story and it’s one where obviously value-based pricing was probably around well before that, but that’s where I like to think it started for me anyway.

Christopher T. Anderson:

How did Henry Ford react to the breakdown? Did he say, oh yes, I get it because I can see clients and bar associations, the various bars that regulate lawyers saying that’s cute, but that’s not how we do things around here. So how thorough has that pushback been? What did Henry Ford say?

Shaun Jardine:

Ford paid it. Ford paid it apparently, this is according to the article that I read the Smithsonian, but apparently, yeah, it was fine. Okay, I get it. And I will pay that amount. And I think it’s one of the things that I talk about when we get into value-based pricing is lawyers do not need every bit of work that comes across their desk. We don’t need every bit of work, we just need more than our fair share of the good stuff. And the stuff that isn’t right for us can go down the road to our competition. And that’s why you will never get that pump fist price unless you ask for it. And also if you are prepared to perhaps say, well, I only want to do it at that pump fist price because otherwise I’m quite happy not to do it.

That is where you have to start permitting your people, permitting your lawyers, or even permitting yourself to say, yeah, I’m not going to do every bit of work. I don’t need to. And I had one client the other week, he got asked to pull an all-nighter looking at a financial services contract and he really didn’t want to do it. And he’s thinking, well, he said to me afterwards, said, Shaun, I knew I could almost hear you on my shoulder saying go for the pump first price. And he asked for 10,000 pounds. And the client said, fine. Because for them getting his advice to be able to sign that or decline that contract next morning at nine o’clock was very lucrative to them one way or the other. And so they said, fine, but he didn’t want to do it based on an hourly rate, but he’d happily stay up all night if he was going to actually get that pump fist element.

Christopher T. Anderson:

And that makes sense. And of course the big difference between what we’re talking about and the Henry Ford engineer story is, what was his name again? I want to give credit

Shaun Jardine:

Charles.

Christopher T. Anderson:

So the Steinitz method is that of course the law firm is going to price it upfront. So Steinitz sent a bill afterwards and had to explain it, the law firm, we’re not going to try to do that with a law firm. Say, yeah, we’ve got this new pricing model surprise. It is going to be negotiated and explained.

Shaun Jardine:

Yeah, absolutely. And the thing is, if we take the time to explain to clients what we are doing and what we’re doing for the price points, and I’m a great fan in having gold, silver, bronze service levels in the same way you get on a plane, we know there’s first class, we know there’s business class, we know there’s a premium economy and then economy, we know that that plane is going to, everybody’s going to land at the same destination, but what we experience on route is different. And you can offer that and you can make those services clear to clients in the same way that car wash menus do or mobile phone contracts, whatever it is, wine lists. But we make that information available to the client and we let them choose because nine times out of 10 we don’t, I don’t know what you value, you don’t know what I value. We don’t know what our clients value unless we start having a conversation with them. And sometimes lawyers can be too busy and thinking, I’ve got to get on with work. I’ve got to get stuck into it and not find out, well, is the client the right fit? Because I’m a great fan of deselecting clients that are not the right fit, the client the right fit, and if they’re not a right fit, the time to find that out is before we’ve done the work, not afterwards.

Christopher T. Anderson:

And the conversation about pricing will really help with that. So let’s turn and ask the question though, why So I mean this sounds cool and it sounds like you said the pump fist price, love, that terminology is good for individual lawyers perhaps who are the equivalent of Tyme. So the experienced engineer, the old hand who can listen to the machine and tap it. But why should law firms, why should our listeners be considering that there is actually a need out there to adopt innovative pricing across the board? What’s in it for the law firms? Why should they be thinking about this?

Shaun Jardine:

What’s in it for the law firm first of all is look, gen AI and technology is going to make us do things quicker. So if we’re going to be billing by the hour and you’re going to stick to the billable hour model, I’ll just tell you now, don’t embrace any technology, just keep doing everything manually and you will be very wealthy as your clients pay the bills. But we know that clients want us to use technology, clients want clarity, they want uncertainty. They want the backing of the lawyer in many cases and they don’t like surprises. And if we’ve got, you’ve got lots of lawyers listening to this podcast, I would challenge all of the lawyers here to think, well look, if we’re having some building works done at our home and we’re having an extension put on our building, are we going to engage the building contractor and all of the subcontractors, the plumbers, the electricians, are we going to engage them all on day work basis?

And the answer is no. I’ve never met a lawyer who said, yeah, I’m quite happy to do that. Why? Because we want price certainty. We want to know actually how much is this going to be? Can we afford it? Do I need to remortgage an element of my property to pay for this? So it’s price certainty for clients. It’s also good for law firm owners because most of law firms will set billable hour budgets by thinking how many hours a year can this lawyer work? Now I know that in the US you have higher targets than we have in the uk, but let’s say is it 1100 hours, 1400 hours or 2,400 hours, whatever it’s, but those are the number of hours, times the hourly rate, which will give me the target of that’s what I want that lawyer to earn. Well, that’s an artificial limit on what that lawyer can earn because I have done with one client where we gave the client three prices, gold, silver, bronze price, one price. This was for employment contracts and handbooks for a corporate client. And it was, we will send you some precedents, standard precedents, you fill them in, we’ll check your homework 2000 pounds, we will do it for you in three weeks time, 5,000 pounds, we will do it for you tomorrow, 8,000 pounds

Client chose the 8,000 pounds

Christopher T. Anderson:

Because that’s was important to them for some reason.

Shaun Jardine:

Absolutely. They had a deal going on in the background. Now was the lawyer happy? Yeah, I’m going to do half my monthly target tomorrow. Yay. Was the client happy? Yeah, I’m getting my work tomorrow. What a great lawyer. They’re really turning this around, correct me for were the law firm owners happy? I really hope so, because actually they’re getting more productivity out of their lawyers. That lawyer hasn’t got to work harder. It’s just got to work smarter. And once you start agreeing fixed prices with clients on whatever range it might be, you are not going to have problems with age debt. You can say, I want to be paid upfront, and all of a sudden it’s better for clients, it’s better for lawyers because working with clients who value what you do and it’s better for law firm owners. So I think it’s win-win win for everybody in the process.

Christopher T. Anderson:

Have you had to address regulatory authority on that? The notion that bars are looking out for clients and making sure that there’s reasonableness in their bills?

Shaun Jardine:

No. Well, the thing is what we can do here, and I think in many jurisdictions you are not obliged to take on every bit of work anyway. So if I want to say, look, hang on, you want a bit of work, you want me to pull an all night? Yes, I’ll do it for this price. Now what tends to happen for litigation purposes, you might, and here we have in many litigation cases, depending above a certain financial limit, we have what’s called cost follow the event. So the winner will get their legal costs paid at certain rates by the loser. So those costs follow the event, but you don’t have to agree your retainer with your client that I’m going to do the work only based on what we recover from the other side because you might recover work at scale rates where the hourly rate allowed is 70 pounds an hour. Well hang on, my hourly rate is 300 pounds an hour. So in terms of value-based pricing, what is interesting is you’ve got some jurisdictions and Victoria in Western Australia is one where their regulators have actually got on their website value-based pricing is a good option.

And now we haven’t quite got that far in the UK yet, but I think it’s inevitable that it’s going to follow.

Christopher T. Anderson:

Yeah, no, it makes sense. But I think, yeah, you hit the nail on the head there with the concept of for instance, being awarded fees from the other side, whether it’s cost follow the event or whether it’s contingent fee or whether it’s some other, what we have here, rule 11 zero, some sort of overly litigious or vexatious litigation where the court’s going to award some fees, there’s still going to, it’s going to be interesting to try to have the court on or value-based billing, honor your contract with your client because sometimes, I mean I know they look sideways at you and go like, I don’t understand that. I can’t understand that. Show me your time.

Shaun Jardine:

One of the senior law lords in the UK was a chap called Lord Berger, and in 2012 he actually cited Ron Baker, who’s this America that I mentioned in one of his speeches. So this was a speech given in 2012 where he said value price pricing is something that law firms should be embracing because the hourly rate, the billable hour penalizes efficient law firms.

Christopher T. Anderson:

Yes.

Shaun Jardine:

And so there it is a speech he made in 20 12, 12 years on, we’re still no further forward on litigation side of things, that’s a real shame. But we’ve got here, Lord Berger’s successor, a guy called Sir Jeffrey Voss. He is very proactive. He loves artificial intelligence and he has made a speech where he says he can foresee a time where lawyers might be negligent for not using artificial intelligence because why wouldn’t you use tools that make you more efficient? Now how that is going to translate into what we get paid and what we recover is another thing altogether.

Christopher T. Anderson:

Yeah. In fact, in the United States we have a BA model rule 1.1, which actually it was passed, oh gosh, it’s got to be about five or six years ago now, and most states have adopted it, but I’m seeing if I can bring it up how fast I can bring it up. But basically the idea is here it is, comment eight, lawyers should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology. And so it’s kind of there already, but I think this was written before AI and now now it’s really going to come home to roost. We’ve got to go and hear a word from the people who pay for this show. And so we’re going to throw it out and let them have a word and we’re going to come back. And I want to talk a little bit about the flip side.

I think we’ve touched on it, but what is keeping law firms, you said 2012, we said this, nothing much has happened on the litigation side, but in a more general sense, what is stopping firms from innovative pricing altogether? We might just answer it stodginess, but we’ll see. But first a word from our sponsors and we’ll be right back. We are back with Shaun Ardine. Shaun is the director of Big Yellow Penguin, former litigation lawyer in the United Kingdom. And we’ve been talking about innovative pricing and what I said we’re going to talk about after the break is what is keeping firms from being more innovative? And you told a little bit of a story about how this was a priority 12 years ago in the United Kingdom, but really nothing much has changed and we’ve seen change. And you’re talking about change. We’ve talked a lot about change on a transactional notion that that’s been easier to do, but on litigation side, we’re kind of stuck in the mud. So what’s going on there? Why are firms hesitant? What’s stopping them from being more innovative in their pricing?

Shaun Jardine:

I think one of the main reasons is it’s a change management project to move away from the billable hour that we have now to value-based pricing. It is not an email that comes from the managing partner saying, today we are going to implement value-based pricing. You’ve got to actually think about who’s involved in this process. And it is, we’ve got to train our lawyers, we’ve got to involve our HR people, we’ve got to involve our marketing, business development people, all of that stuff. And so it is a change management project. And the conclusion that one of the finer paragraphs of my book talks about that it is a change management project. There’s an element of time consuming in this. And I say, and you should be pleased about that, dear reader, because it means that most firms won’t do it.

Why are you going to change what you are doing now? Well, if you’re looking at a reason to do something, as I say, if gen AI is going to come and eat our lunch and all these systems are going to be doing stuff so much quicker, why are we going to stick to the billable hour? That doesn’t make sense to do that. B, there’s going to be pressure from clients to say, we want to do that because they’re going to be using AI in their businesses and they’re going to be looking at us and saying, why aren’t you and think we’ve got to do that. And if I’m being cynical at the moment, why tell a room full of what might be millionaires that their business model is wrong if they’re still carrying on and racking out billable hours and they’ve got clients that are paying lots of money for billable hours. But I could tell you that in-house counsel are even getting wise to this and want to know more about value-based pricing because they’re wanting their clients or their law firms or their panel law firm members to start looking at offering value-based options.

Christopher T. Anderson:

And that’s what, as you were talking through it as a change management project, that’s what came to my mind was some change management projects are internal and they may affect a few stakeholders in the business or many. And this one you explained, it’s kind of many, but it jumped into my head also that it’s not just inside the business because you’ve also got change management in educating the consumers of the service, whoever they might be, whether they be general counsel of another business or somebody else who buys the services. How much of an effort needs to be put out there because you mentioned maybe they’re already looking for it, but when you’re bidding for work and you’re bidding in a way that they’re not used to seeing, how do you go about that education?

Shaun Jardine:

Well then it’s a question of what are you putting in your tender responses and things like that to say, look, we don’t bill by the hour, we don’t time. There’s a firm in Australia that I know said, well, we don’t give you any time recording data because we don’t time record, but this is what we look at projects. We will scope those projects, we will give you three prices for those projects depending on what you in-house counsel want to pay. Are you looking for the Golden Rolls Royce service or are you looking for something that good enough is good enough on this particular project? And one of the, that lots of clients always, certainly in-house counselors sometimes have is sometimes they get an over-engineered solution with loads and loads of people working on saying, I don’t need that. Just sometimes good enough is good enough. I’m prepared to take certain risks on things, but until you spell it out for me in those versions, I don’t know. And the service level that we can give could be, let’s take litigation for example. Everybody says, oh, litigation, you can’t give a fixed price for litigation. Shaun can’t be done in my sector. If you think of dropping a pebble into a pond or we get a load of concentric circles, the center of the concentric circle is what I call yes work.

If I said to any litigation lawyer listening to this podcast, can you give me a fixed price now for drafting a letter to my next door neighbor for encroaching on my boundary and the fence is falling over or he’s moved the fence, can you as an expert litigation lawyer draft give me a fixed price for doing that? And he asked to be, yeah, because we know how to do that. It’s not too complicated. And that is yes, work, the next circle out is likely work. What is likely to happen when that letter lands on my next door, neighbor’s doormat. And I can tell you it’s one of three things. First is it’s ignored. The second is we get a vitriolic letter or phone call from the neighbor concerned. Thirdly, we get a vitriolic letter or phone call from the neighbor’s lawyer. That’s likely to happen. So expert litigation lawyer, can you give me a fixed price for yes work and likely work now? And the answer is yes, because I’m an expert and I know how to do that. The next circle out from there is who knows?

And all I’m saying to litigators is when we get to that third, who knows phase? Well, we know what’s happening in one and two, we can then, because we’re experts give you a price for the who knows element because we are there, we can now give you a fixed price. And it’s that I’m not saying we’ve got to price everything from taking instructions from the client up to the appeal court decision. If we were that good and we were that psychic, we’d all just play the lottery and not do law. But what we can do because we are experts, is give prices based on our experience and we scope it out so that if we say in our litigation, you have told me Mr. Client, we need four witnesses. I’m going to do my price for that scoping part of four witnesses. If it transpires, we need 12 witnesses when we get there, I’d say to them, look, we did this on the basis of four. You now know we need 12. I’m going to have to amend my price and this is the fixed price for the extra eight witnesses. And what lawyers don’t tend to like doing is necessarily having that conversation when something’s gone out.

Christopher T. Anderson:

Sure.

Shaun Jardine:

And that’s where we do the work and then we’ve lost control of it. And then the client might turn around and say, well, I’m not paying another $10,000. You didn’t tell me. And damn right. Because what we want to do is tell our clients what’s happening. And I encourage my clients to say, look, imagine this is a unique selling point for a lawyer. We will never deliver you the client a bill that you have not previously authorized. It can be done. It can be done. All we’ve got to do is start having conversations and not be afraid of that.

Christopher T. Anderson:

In a sense, when you were describing those concentric circles, in a sense, really that third circle by the time you get there is almost back to yes work. I mean, you’re starting a new circle.

Shaun Jardine:

Absolutely. Absolutely. And so because we’re experts, we know we can do that. So many lawyers will say, no, I can’t give you a price for that. Now you put yourself in the shoes of the client, you think, hang on, you’re telling me you are an expert lawyer and you do this every day, but you can’t give me a price for it. You are not much of an expert, are you? And that’s the thing. The other thing I’m always passionate about options for is if I give you an hourly rate and it’s take it or leave it, it’s a 50 50. You’re either going to go with my hourly rate or you’re going to think, I dunno, I’m going to leave it if I give you three prices, gold, silver, bronze, or leave it, I’ve got three opportunities of selling to you. And one of where you say I’ll still leave it. And even if you then say, I’m not happy with that, I can say, well, why aren’t you happy with any of these options? And if it is, well, I’ve only got a hundred dollars to spend for this litigation and you can’t do it for a hundred dollars, I’ll say, okay, fine. You are not a fit for my firm. That’s okay. I’ll try and sign post shoots of some kind of free legal advice service or something like that.

But when we might in our gold service, our gold litigation service say that part of our communication is if you are the client, Christopher, I might say to you, Christopher, look, you are my client. Part of our Gold Service reporting is I will come to your offices and attend your board meetings. And I as the lawyer will explain to the board what’s happening with the litigation. And the client might be thinking, oh, that’d be great. I don’t necessarily understand all this jargon or what’s going on and I’d love you to do that. That’ll get me out of a hole. Well, until we offer that the client doesn’t know that’s even something we’re prepared to consider. It’s that kind of thing really.

Christopher T. Anderson:

Yeah, no, that makes a whole lot of sense. Alright, we’re going to hear from our sponsors one more time. We’re talking with Shaun Jardine, director of Big Yellow Penguin. And when we come back, we’re going to jump out of law if you don’t mind, because I want think context is important and I think we’ve given some great ideas here about how firms should be thinking about value-based pricing. So I wanted to just jump out and say, are there other professional services that are doing it well? And maybe talk about some examples. But first a word from our sponsors, then we’ll be back with Shaun Jardine in just a moment. Alright, we are back with Shaun Jardine. He is director of Big Yellow Penguin. He’s also got himself a inflatable penguin named Declan that he is the legal guardian too. But we’re going to be, we’ve been talking about innovative pricing for law firms and we could go on for hours on it, but I wanted to turn a little bit and give some context. I think just basically to help people conceptualize this because for a lot of our listeners, Shaun, I mean I think we’re talking about something that is so new and so different that it’s hard to visualize. It’s hard to say. How would this work? And we have given some examples in law, but let’s go outside of law for a second. Do you have any examples that businesses outside of law or outside of professional services even that do innovative pricing really well that we could learn from?

Shaun Jardine:

I think there are so many, Christopher, look, I’ll go out on a limb here. The chances are everybody listening to this podcast hates going to the dentist.

Now, when you go to the dentist, or at least over here, what you do is you ring up, you make your appointment, you go turn up at the reception, you sign the appropriate forms, and then you wait. You go into the consulting room, somebody does unspeakable things with your mouth and then you stand up, you say Thank you very much, and then you go out and you get your credit card out and you pay. And then they say you want to make an appointment for six months time and you say yes. And I say, well, we’re going to take 50 pounds on account of that for the next appointment. What we don’t ever do, or at least I’ve never done, is say, can someone tell me how much it costs for that filling? How much of the x-rays, et cetera, et cetera. And what’s your hourly rate? I’ve never been interested in that because I will tell you I will happily, and I’ve had root canals, I want the root canal done by the most experienced person and I want the root canal done in the quickest possible time.

Christopher T. Anderson:

Yes,

Shaun Jardine:

I don’t want somebody necessarily hanging around a long time drilling my tooth. And so it’s that kind of thing. And surgeons are very good at this. If you go private over here, and I imagine in America, many of your listeners go private over there, they will value what they do. And my wife had to have an eye operation and she went to see a surgeon. He said, look, I don’t do this type of work that you need. You need this person. And so we tracked him down and I said, okay, we are going to go see this person. And we said, this is what our health insurers will pay for you to do it. He said, I won’t do it for that rate. You are going to have to pay more.

Christopher T. Anderson:

Now

Shaun Jardine:

My wife will say, oh, well, should we just have the other guy do it? And I’m going, no, why are you going to take, why are we going to take it? This is bet the farm type work. This is where we don’t want someone to have a go. We want the person who’s going to get this right. And in the end, it was worth every single penny. And a lot of it comes down to us being confident, having confidence that what we do is worth it and being prepared to stand our ground. But also lawyers knowing what to say when clients do object to price. And if you ask people in your own firm, when someone says to you, that’s a lot of money, what do you say? And there’ll be someone in your organization that says, I say this and then I think, well, that’s a really good answer.

Let’s write it down. Keep that within the team, however we store our knowledge in our business. And then let’s all start using these responses and start collating a wealth of knowledge. Because I have one client I worked with, she was working for a big magic circle firm over in London and she went out on her own. She was doing software as a service contracts, a client tracked her down and said, will you work for me? I need a contract. She said, yeah, I will do this contract for you for 2000 pounds. Client commercial, a good businessman said, that’s a lot of money. Will you do it for 1800 pounds? I said, okay, yeah, I will. Next day I had a call with her and I said, how much would you have charged to do that at your old firm? She said, 10,000 pounds. I said, why did you even offer 2000 pounds? She said, well, I now work at home. I said, your client doesn’t care where you work. He cares about what’s between your two ears. And then we did something called Possibility Thinking where we added lots of features through a gold service. And at the end of that, she said, had I, had we done this possibility thinking exercise, added all these features, she thought the client would’ve bought the Gold Service for 15,000 pounds.

But she didn’t know and hadn’t done it, but she does now.

Christopher T. Anderson:

I think that’s really key. So before we go, I do want to ask, because we mentioned at the first of the show that you have written and published now the Ditch the Billable Hour book. Again, we’re on a podcast where people can’t see, but you’ve got a poster behind you right now and oh, you’re holding up the book. It’s got a big penguin, not a yellow penguin, but the book has yellow on the cover. Why should people read this book? What’s in the book? What will people learn from Ditch the Billable Hour?

Shaun Jardine:

What I hope people will learn is, look, how do I implement this? It is very hands-on manual. It follows Kotter’s methodology of change. It starts with P number one is paradigm. Why do we need to make this change? And if any of your listeners wants to get a copy of the plan, it is called a Racy template. It’s 130 point plan identifying who in a legal organization should be carrying out which task. It’s available on my website, big yellow penguin.co uk. Please download a copy. It shows you the size of the elephant. And if we’ve got to eat this elephant one bite at a time, let’s have a look at the size of the project. You can have that absolutely free of charge. But the book has got lots of resources in it. It’s got lots of links to YouTube clips, articles, cartoons. We all learn differently. And what I want people is to think, ah, now I get it. The penny drops on X point. And that’s great because look, we’ve got to do this. We’ve got to do it as a profession. It’s a very much a how-to guide and I hope people like it.

Christopher T. Anderson:

Well, thank you and I think people will. So now as we get ready to depart, and thank you for your being on the show. If you had to give firms one piece of advice right now about pricing, what would you tell them?

Shaun Jardine:

Two pairs of eyes on every price. You don’t price your own work at isolation, Christopher, I will price your work so much more bullishly than you will

Christopher T. Anderson:

Because

Shaun Jardine:

You are going to have the conversation with the client. But I will challenge you to say, come on Christopher, you are very experienced, are going on holiday tomorrow, but you want to do this bit of work. Let’s make sure that we extract the value for this for the client because you are worth it. And that’s what we’ve got to remember. We are worth it. And two pairs of eyes on every price.

Christopher T. Anderson:

I think that’s fantastic advice and that does bring us up to the end of this edition of the Unbillable Hour. So I’m going to thank all of our listeners for hanging out here with us today. I think they got amazing value from the show. Our guest today, once again has been Shaun Jardine. He’s the director of Big Yellow Penguin and Shaun, we talked about so much, but we really just scratch the service now. We did give the website, if you give that again and if people have other questions, how else can they reach out to you?

Shaun Jardine:

The website is big yellow penguin.co.uk. You can reach me via that. You can reach me via LinkedIn. I am a great fan of LinkedIn and if anyone’s got a question, just drop me a line and let’s have a chat. I’m more than happy to have a chat with anybody anytime about this because I believe in it quite passionately as I hope I’ve demonstrated.

Christopher T. Anderson:

Yeah, that’s been abundantly clear. Thanks once again for being on the show.

Shaun Jardine:

Thank you, Christopher.

Christopher T. Anderson:

You bet. And of course, this is Christopher, T Anderson, and I look forward to being back with all of you listeners next month with another great guest as we learn more about topics that help us build the law firm business that works for you. And remember, you can also now be a participant. You can be on the show. The community table with Clio is every third Thursday at 3:00 PM Eastern Time, 2:00 PM Central, 12 o’clock Pacific, one o’clock Mountain Time. But the community table where you can call in and whatever’s bugging you about your law firm business, whatever hurdle you’re facing or whatever growth you want to achieve, you just call in and ask us. Joshua Lennon, myself and others will join us on the community table to answer your questions live. So we look forward to seeing you there third Thursday at three. And of course you can subscribe to all the additions of this podcast at legaltalknetwork.com or on iTunes. Thank you very much for joining us. We will speak again soon.

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