Pat has been an advocate of Value Pricing, writing about it on his blog, In Search of Perfect Client Service.
This is more evidence that the change from hourly billing to Value Pricing must come from the law firms themselves, not their clients. Imagine if we all tried to shift responsibility for change onto others? If you’re not responsible for something, how can you change it? And who is responsible for pricing strategies? Always, and everywhere, sellers. For the economic reasons for this, see my post here.
I hope Pat’s new firm embraces Value Pricing and all of its concomitant consequences, such as the necessity of eliminating timesheets. He has a post over on his blog from August 20, 2007, where he mentions a couple of other posts, and a comment to one on the necessity of keeping time. Here’s the comment as introduced by Pat:
One of the most interesting comments is from Grasshopper (sorry, I’m having a flashback to Kung Fu, the old TV series):
Daily time entry is a good thing. I defy anybody to maintain good accounting of what they did day to day and then record their time at the end of the week or month. Daily time entry is good business hygiene. You do right by the client and right by the firm.
I was a huge Kung Fu fan myself and I can say with 100% confidence that Grasshopper has not taken the pebble from the hand of the master, which is why he’s a knowledge worker still doing minute-by-minute timesheets.
If you truly want to embrace the principles of Value Pricing, timesheets have to go, period. What replaces them you ask? Good question. Here’s the answer:
- Price led costing;
- Excellence in project management (following Kless’ Law that if you suck at project management, keep timesheets);
- Key Predictive Indicators that look forward rather than backwards (Chris Marston has a great post on this over on his blog);
- Before Action Reviews;
- After Actions Reviews.
This is how the 500+ professional knowledge firms around the world operate without timesheets. It’s being done everyday, quite successfully. Is it easy? No. In fact, it’s quite difficult. But I can’t think of a competitive advantage that’s easy or cheap.
If you don’t know what the above mentioned items mean, you’ve got an incredible learning opportunity in front of you.
Many people don’t like this answer, but facts are facts—what is, is. This is “how” firms are operating without timesheets—in the real world.
I hope Pat’s new firm does it too.
I have to believe he’s snatched the pebble.