Yesterday during the ILTA (International Legal Technology Association) Annual Conference, we had the opportunity to attend the Defining and Delivering Value session. The session focused on a law firm client’s perspective of value. The key themes explored were: defining value, differentiating value, communicating value, and measuring value. Below is a summary:
What is a cynic but a man who knows the price of everything and the value of nothing.” – Oscar Wilde, Lady Windermere’s Fan (1892)
McKinsey Insights defines value as “The real essence of value revolves around the tradeoff between the benefits a customer receives… and the price he or she pays for it.”
Value = Benefits – Costs
Value based pricing is a clear and concise statement of the tangible and intangible results a customer gets from using your products or services that clearly differentiates you offer from the competitors. The three essential components are to:
- Resonate. Clients must have a need for your service(s)
- Substantiate. Clients must BELIEVE you can deliver
- Differentiate. Clients must understand how you are different
Differentiate your value and your value proposition by completing the following:
- Listen and fact-find: Who is/are your audience(s), and what are their needs?
- Segment: Differentiate on a firm, practice/industry, and attorney level
- Develop Options: Differentiate between options you create
- Paths to Differentiation: Expert/reputation, trusted advisor
- Stories: Tell stories that reinforce the differentiation
Communicate your value through:
- Branding (“walking the walk”)
- Working from the same script (consistency)
- Learn the client’s internal incentives and deliver
Value can be consistently measured by delivering value in pricing and client relationships:
- It’s not just about fees
- Find your “bright spots”
- How do you like your latte (know your clients)
- Build a good tool box
That which is measured improves. Make sure to collect data analytics and create metrics to measure value creating the tools to move from cost-plus pricing to value pricing. Value can be a challenging concept for some and that is what differentiates successful firms. By delivering efficiency at low-cost, performance metrics, budget alignments and AFA arrangements, as well as “what if” scenarios firms will be able to meet the corporate legal department’s perspective of value.
A big thank you to the session panelists; the content was fantastic and laid the foundation for what a law firm places on value.
Delilah Flaum; Winston & Strawn LLP
Doug Woods; Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
John Ferko; Miles Stockbridge, P.C
John Thompson; Purdue Pharma LP
Patrick Johansen; Brinks Hofer Gilson & Lione
Stuart Dodds; Baker & McKenzie