Episode 4: Nigel Haddon on the Behavioural Economics of Value Pricing
“Pricing can have a transformative impact on not just the finances of a law firm, but also on its relationships with clients.”
In Episode 4, David spoke to Nigel Haddon, founder of Haddon Consult, about value pricing in the law firm context.
Nigel worked in private practice for 30 years, becoming a managing partner towards the end of his career. In that role, he became familiar with value pricing - leaving the law to become a pricing consultant with Bircher Jennings and eventually setting up shop himself.
Why pricing? Nigel says, “I hadn’t seen anything have as great an impact on the fortunes of a law firm as that. As any managing partner will tell you, you try every lever there is. You pull ‘this’ to get half a percent marginal gain there, you cut costs here [and] there, but pricing can have a transformative impact on not just the finances of a law firm, but also on its relationships with clients.”
Nigel speaks about the behavioural impacts of offering clients choice to clients, which gives them a sense they’ve secured a good deal. He contrasts that, with the billable hour, which can often seem intimidating to clients.
We end the conversation speaking about developments in AI, that Nigel believes, in part, will force firms to think about value rather than pricing their fees in the traditional way.
Nigel is a former Chair of the Law Management Section of the Law Society. He is a Teaching Fellow in Pricing on the Master of Legal Business course at the College of Law Australia.
Listen to the full episode now!