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PRACTICE MANAGEMENT

Pricing Council and CVO Purpose and Criteria

 

By RONALD J. BAKER
JUNE 2009

Editor's note: This is a Web-exclusive exhibit for "Pricing on Purpose: How to Implement Value Pricing in Your Firm."

Examples of purpose and strategy statements for the role of the pricing council and chief value officer (CVO) are:

  • To ensure the firm prices on purpose, according to the value received by the client, not the costs incurred in performing the work.
  • To make pricing for value a core competency within the firm.
  • To change the marketing culture within the firm from one that believes “we sell time” into one that comprehends, creates, communicates, convinces and captures the value of the services we provide to our clients.

The criteria to look for when selecting a CVO and appointing a pricing cartel can be summarized with the acronym LACEY:

  • Leadership skills. Since pricing is a multidisciplinary function that cuts across the entire firm, pricers must be respected and have demonstrable leadership skills.
  • Attitude. Leaders who believe there is nobility in being paid what the firm is worth, and who have an attitude of abundance and value creation.
  • Commitment. A CVO and pricing cartel who do not have the support of the managing partner are destined to fail.
  • Experimentation. Pricers must be willing to experiment and cannot be prisoners of the past because “that is the way we have always done it.” Excellence in pricing requires learning from failures and successes.
  • Youth. Organizations, like people, tend to calcify with age, and youth can keep the blood pumping more vigorously. Young professionals are typically not as tied to the billable hour as are the older generations.

 

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