Our work with firms around pricing is initially concentrated on partners and senior management. Inevitably however, there is a realisation that any new pricing philosophy and execution methodology must reach more broadly across the firm. Although it is not usually a decision taken by the firm until after we have already worked extensively with partners, the Associates Pricing Workshops, which are a condensed version of the Validatum® Pricing Masterclasses®, can be an important contribution to the dissemination of the new skills and techniques.
The problems:
Associates often have little if any understanding of the economics of files and file management. Awareness of what makes a particular piece of work profitable or unprofitable can be patchy. There is a broader case to be made for investing in this sort of professional development but as a start, understanding what impact price has on file profitability can be invaluable.
1. Some Associates are permitted to exercise a degree of pricing autonomy. As professionals crafting, documenting and negotiating fee proposals with clients, it is vital that they have a sound basic understanding of the concepts, techniques and strategies in which the partners will have been more deeply immersed.
2. Some Associates act as supervisors and mentors for junior professional staff. The Associates need to be able to confidently articulate the firm's pricing philosophy and methodology to those juniors.
3. Senior Associates are often seen as the future of the firm and partners-in-waiting. For this reason, most firms now recognise the need to instill in Associates commercial awareness and acumen that will benefit the firm. Because pricing capability is a skill that can only be cultivated on a foundation of technical knowledge and extensive practice, the benefits of an early start are self-evident.
4. Some Partner/Associate relationships operate on a 'command and control model' whereas others are more collaborative and view senior Associates in particular as colleagues. In the latter instance, the professional relationship will often provide a foundation for constructive debate, stress testing and alternative perspectives around pricing.
The solutions:
We have crafted a compressed masterclass structure for Associates that has three key elements;
(a) Understanding the main elements of file economics and what makes a particular piece of work profitable or unprofitable,
(b) Exposure to core pricing skills, techniques and strategies, and
(c) Demonstration of pricing using one or two of the participants current active files.
The benefits:
(a) Associates will improve their own pricing metrics,
(b) Associates will be better placed to support partners in the pricing function, and
(c) Associates relationships with their own clients will benefit.
