Summary
Expect to learn what it takes to effectively price a complex and unpredictable project, employing strategies like unbundling and patient pricing, while focusing on understanding the client's vision of success.
3 Key Takeaways from this Video
- Rely on experience and continuous learning: Using tools like AltFee, legal professionals can rely on their past experiences to inform pricing decisions, continuously adjust factors and amounts based on their learnings.
- Utilize unbundling strategy for complex projects: Unbundling a complex project into phases, for example starting with the letter of intent stage in an M&A transaction allows for pricing certainty and the opportunity to build trust and understanding with the client before proceeding to the rest of the project.
- Be patient in pricing and focus on understanding the client's vision of success: Taking the time to understand what success looks like for the client, predicting future needs, and breaking down projects into manageable phases can help professionals price complex projects more effectively and build a strong client relationship based on trust.
Transcript
0:06 How am I going to know I'm gonna get it right on an unpredictable project and that could take some time to complete.
0:14 So, rely on your experience. And so, AltFee is a way in which it's continuous learning and every time you have an experience, you add to the factors, you adjust the amounts.
0:29 And so, you're able to rely on that experience in terms of creating the price the next time.
0:37 A strategy which is really helpful is unbundling, which is a common expression in the legal industry, but what it really means is taking a portion of a larger project and pricing it on its own.
0:50 So, as an example, in an M&A transaction which could go on for months, could have a lot of unpredictability. One of the strategies might be to unbundle the letter of intent stage, the L.I.
1:04 Stage and to do a fixed fee price for that, knowing that you can put parameters around that based on terms of the L.I agreement.
1:14 And so it's a, a way in which you can get a lot more certainty and be a lot more comfortable.
1:21 Lawyers that are moving away from hourly billing really think about how am I going to price complex projects? Because I know it, there's some unpredictability and all of it, and it's got a lot of factors.
1:34 So pricing a complex project that's going to go on for some time is definitely something that is a major thing that people that lawyers think about when they move away from hourly billing.
1:49 And I think the way to do that and be successful and feel good about it is to be patient in pricing and not get to the price right away, but get to know what success looks like for your client.
2:02 And so that's going to help you predict the future. You're going to know what advisors are helping and how the information flows.
2:12 So the being patient and strategy that is really helpful is breaking the project down into phases. And particularly if you unbundled the very beginning strategic planning phase like the letter of intent stage and pick a price that is something that the client can get comfortable with.
2:34 You can get comfortable with and give you a real opportunity to build trust and understanding of what it success looks like for your client, that's a really good strategy to employ.
2:45 And allows you to then once the first phase the planning phase is completed often you feel very comfortable pricing the entire rest of the project with a pretty good feel for what the client's looking for what success looks like.