Value Pricing Q & A: Stop pricing seniority

Q: When you have a senior lawyer and a junior lawyer working on one single fixed price project, how do you attribute to each of their KPI’s (whatever they might be)? Naturally the senior lawyers time is more “valuable” than the junior lawyer’s time.

A: Is the senior lawyer’s time always more valuable than the junior lawyers…?

What if the junior lawyer comes up with the answer or solution before or instead of the senior lawyer?

We have to learn to stop pricing our seniority in the firm and learn to price our clients individually by focusing on what is important to them and what they value most and how we can provide that value to them.

In many firms that practice non-time based pricing, the KPI’s used for  individuals in the firm tend to be different to the traditional 'blanket' KPI’s imposed upon “fee earners” under the time based billing model. For instance, instead of valuing hours and striving for more hours (so firms can be paid more), lawyers are measured more by things such as turnaround time, client satisfaction, innovative solutions, as well as of course monetary return to the firm.

Many of those firms have also moved to team budgets and goals rather than individual ones. Teams tend to self select themselves and again there is more emphasis placed on people and project management than hours recorded and billed.

Firms that still allocate revenue in a Value Pricing environment do so upfront, and that allocation is decided by the team who work on the matter. This makes it fair, sets expectations, and is self-insuring. If someone doesn’t pull their weight, their colleagues cut the allocation.