An American by the name of Ron Baker is coming to town. I am certain I have never seen a mission statement with such a resolutely split infinitive as Baker’s: ‘To, once and for all, bury the billable hour and timesheet in the professions.’ He is a leading exponent of ‘value pricing’, who’s moved out of the accounting world whence he hails into the legal arena. He has written what are said to be some of the best books on the subject.
Our foremost indigenous enthusiast for the same philosophy, John Chisholm, is quite the disciple, and is helping to publicise Baker’s ‘Firms of the Future’ forums which will feature value pricing heavily, but will predict other aspects of best firm practice. At this point in my journey towards understanding what Baker’s on about, it is easier to point to what value pricing is not. As the mission statement suggests, it is not recording time on timesheets and then arriving at a charge by reference to the hourly rates of the fee earners. It is agreeing a price for the work at the start, and it involves moving away from arriving at that price principally by reference to the time it is going to take. Baker is speaking for a day in Melbourne on 5 March 2012 — I’ll be going, briefs permitting — and conducting a half day masterclass at the MCG the following day. (Hobart = 2nd, Brisbane = 12th, Sydney = 15th). To go, you have to pay $1,628, or $935 for just the talk or $880 for just the masterclass, but if you’re not completely satisfied, you can ask for a refund of the difference between what you paid and what you think it was worth, a version of value pricing I suppose.
Value pricing can work in some circumstances, but like any business, a lawyer needs to know what their cost of services is likely to be before setting a sale price. While I think that as lawyers we should look at this model, I am yet to be convinced that it will, at least in the short term be adopted across the industry.