Browsing articles filed under Legacy Posts
The Latin term for price is pretium. Closer investigation reveals that pretium also means ‘value’. The Romans had the same word for price and value: pretium = value = price; something that is at the core of every transaction.
In this guest blog post Chrissie Lightfoot – The Entrepreneur Lawyer - is interviewed by Preston Clark. Preston is a New York based attorney, business consultant and creator of TheLawInsider.com law blog http://www.thelawinsider.com.
It’s no secret that corporate legal departments have embraced the use of RFPs and other competitive bidding mechanisms to identify, vet and engage outside counsel. Consider keeping your powder dry for the ones that survive the firms' own triaging process.
"If you don't know where you're going, any road will take you there" said the Cheshire Cat to Alice. Unfortunately, there are some strong parallels between the aimless wanderings of Alice (from Wonderland) and the approach that many firms apply to the pricing function.
A cost benefit/analysis may reveal that whilst the practice generates additional gross revenue, this may be outweighed by the negative effects on client perception and attitudes. What does your firm do and what impact does it have?
Many firms have fallen into the habit of either offering or if insisted upon by a client or prospective client, agreeing to a free first interview. Is this a smart marketing initiative or a dopey value destruction strategy?
We, as a profession, are terrible at pricing. Awful. Lost. Clueless. Atrocious. Self-immolatory. I could go on, but only to hammer home the point, so that we can come to accept it more easily. The shoe fits, so we might as well wear it.
How many businesses do you know where the employees are given a mandate to set the price of the products or services? Would you invest in a business where the profitability fluctuated at the whim of mid-level or even junior staff?
As pricing analysis, policy and strategy becomes increasingly important for firms competitiveness and profitability, they are looking for increased expertise in the area, new breed is very slowly emerging – the Pricing Manager/Pricing Director.
'Value Billing' is variously described as ‘what the client will stand’, ‘hourly billing plus some more’, ‘ask the client what they think it is worth’ etc. However, there is no future for any pricing regime that lacks integrity, honesty and rigor.
Many firms believe that they go into client price negotiations well prepared. Maybe this is true in terms of the offering itself (a moot point perhaps) but as often as not, they go into those discussions ill-prepared in terms of their mindset.
Firms are struggling to deal with commercial clients such as banks and other large corporates who at least outwardly eschew all attempts to develop a relationship, add value and differentiate the offering. Price is all that matters.
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