Value is in the Eye of the Beholder

Michelle Golden of Golden Practices writes about defining value in her August 25 post. Her post is a reminder that value to the client is not, in any way, shape or form, related to or dependent upon the factors that go into producing your service. Value to the client is entirely based upon the client’s circumstances and perception.

Make sure you read the comments to Michelle’s post as well – where the relationship of cost and value are further discussed. As a practitioner and a business person, YOU must take cost into account when determining whether it makes economic sense for you to take on a particular client or matter. But your costs don’t determine the value to the client.

Sometimes the economic reality is that you can no longer afford to provide a particular service. However, giving up on that service isn’t always the answer. Here are two things to consider:

1. Perhaps you’re working with the wrong clients – are there others out there that would value your particular service more than your current clients, and be willing to pay more for it? If so, you need to focus your marketing efforts on attracting those kinds of clients.
2. Do your clients really understand the value that you’re offering? Have you done a good job of educating them about the benefits of your service? At first glance, clients may be skeptical of your fees, particularly if they’ve been told by others that they offer the ‘same’ service for a lower price. But more often than not, the ‘same’ service isn’t really the same. If your service provides substantial benefits, once clients understand those benefits, they’re likely to be more willing to pay for them.

Michelle’s post quotes heavily from Ron Baker’s post, The Fundamental Economic Assumption. You can learn more about value billing from the VeraSage site, Michelle’s blog, or in my other posts on value billing: Value Based Billing For Lawyers – Will It Work?How Much Should Lawyers Charge?More Perspectives on Alternative BillingValue-Based Billing – Too Nebulous to be Effective? and Is It Time to Change How We Charge for Legal Services?