You’ve scoped the job, you know what the firm needs to charge, but you are afraid of charging what it really is going to cost? So what are you actually afraid of? That’s what this episode is all about.
You may not set your firm’s rate card. You do decide what goes into the scope, whether you go back to a client when the job grows, whether you write time off at the end of the month rather than pick up the phone, and whether a proposal explains what the client is getting for their money. Nobody signs those decisions off for you. How you make those decisions will determine whether you are ready for partnership OR you will be able to grow your practice sustainably.
The fee you quote is capped by what you believe the work is worth to the person buying it, and by what you believe you’re worth doing it.
I’m Heather Townsend, author of Poised for Partnership and co-author of How to Make Partner & Still Have a Life. I’m the leading global expert in what it takes to move from senior fee earner to partner . Here are 5 ways to work with me.
In This Episode You Will Learn:
- What you can influence with the profitability of your work even when you have to work off a set rate card
- How small incremental decisions can significantly increase the profitability of your work.
- What a client is really telling you when they ask whether you can do it cheaper
- The one question to answer before your next fee conversation, so you are more confident quoting a fee
If you find this episode useful, don’t forget to like it and then subscribe so you don’t miss another episode.
What Help Is Out There For You?
If you’re thinking, ‘I understand all of this, I just can’t make myself do it when I’m sat in front of the client’, our Progress To Partner Academy can help you.
That’s precisely why part two of this episode sits inside the Progress to Partner Academy. It takes you through naming the specific fear that’s operating on you, testing it against what actually happens in firms, and working out where your number is coming from, so you stop pricing from your own pocket.
You can also listen to this episode on Substack and on Apple Podcasts
Hello, and welcome!
You’ve done the scoping. You know what the job involves, you know roughly how long it’ll take, and you know what the firm needs to charge for it.
Then the client asks what it’s going to cost.
And in the second before you answer, something happens. You round the number down. Or you say it and immediately add, “but obviously there’s some flexibility on that.” Or you start explaining the fee before anyone has questioned it.
Nobody asked you for a discount. Or said you were too expensive – despite what that voice in your head said.
So what is it you’re afraid will happen if you say the price and then stop talking?
That’s what this episode is about. It’s about why pricing is so hard and how we have to deal with the mental game in our head first.
This is actually a 2 part episode. The second part is just for our Progress To Partner Academy members and covers
- why your own self esteem puts a ceiling on the fee you quote, (and 5 tips to improve your self-esteem)
- how your client is actually taking the decision, (and what you can do at a brain based level to influence this before you even talk about pricing)
- and what you can do to raise the value of your work in their head before quote a fee
Once you understand the mechanics of this at a brain based level, you’ll feel more confident pricing your work at a level that means you can make a healthy profit or recovery on the work.
This is the How to Make Partner podcast with me, Heather Townsend. The author of Poised for Partnership, and co-author of How to Make Partner and Still Have a Life. In this podcast, I will be highlighting some of the great stuff in our Progress To Partner Academy. New episodes are released weekly, so press subscribe so you never miss a new episode.
Right. Let’s talk about the conversation you have with yourself before you ever have the fee conversation with the client.
Over the last two episodes we’ve been looking at the mechanics. What to say when a client asks whether you can do this cheaper now the firm has AI. And how to move a client from being billed by the hour onto a fixed fee. Both of those episodes give you words to use and a process to follow.
This episode is about why despite knowing this stuff at a rationale level, it is still hard to do. On the one hand you know you need to price at the right level. But on the other hand you are worried you will lose the work if the client thinks it is too expensive.
Now, I know what you’re thinking. “Heather, I don’t set the prices. There’s a rate card, a partner signs off the fee, and none of this is my decision. Or I have to price within certain guidelines set for my part of the firm.
I understand that. But have a look at what you can control.
You decide what goes into the scope, and what assumptions or conditions you have made.
You decide whether you go back to the client when the job grows beyond what was agreed. You decide whether you write the extra time off at the end of the month rather than pick up the phone.
You decide whether the proposal explains what the client gets for their money, or just lists what you’re going to do. And you decide whether you put a number in front of a Prospective Client at all, or if you are not a partner wait for someone more senior to do it for you.
As an aside, one of the key attributes that partners are noticing is whether an individual is willing and able to have the pricing conversation without needing a partner with them. If you are able, this is a sign that are showing the right signs to be ready for partnership.
Nobody signs those decisions off. They are the decisions you make. Or make by default because you procrastinate or don’t do something when the work goes over budget.
Your partners will look at your figures. They will see your financial metrics. They will also make a snap judgement on what this means before they talk to you about it.
A senior manager who regularly writes off work doesn’t get seen as generous or as good with clients. They get seen as someone who isn’t yet thinking commercially. Is that what you want partners to be thinking about when they think of you?
Given that getting your pricing right is a key part of your personal and business case, why don’t we all get far more confident with stating a price? And being confident in our pricing? Before I go into neuroscience, your level of self esteem has a huge impact on your confidence with pricing. In part 2 of this episode for paid subscribers of our Progress To Partner Academy, I talk about how to positively influence your self esteem.
There’s a small, fast part of your brain called the amygdala, and its job is to scan for anything unfamiliar and treat it as a threat until it’s satisfied you’re safe. It doesn’t distinguish between physical danger and the prospect of telling a client who you’ve known for four years that the fee has gone up. Both come back as: “this is dangerous”
That’s why this feels tough. Your brain is steering you back to your comfort zone. The easy option, the one that wouldn’t upset the client.
So let’s get the fears out and look at them
“If I hold the fee, they’ll go somewhere cheaper.” Some will. In my experience the ones who leave over price are usually the ones taking up most of your time and giving you the least back. Rather than guessing, do this before the conversation: write down what this client would actually have to do to replace you, and how long it would take them.
“I’ll damage a relationship I’ve spent years building.” Relationships get damaged by surprises. A unexpected bill with no warning does far more harm than a conversation up front about what the extra work will cost. So have that conversation early, before you’ve done the work, not after.
“They’ll push back and I’m no good at that conversation.” Most clients don’t push back. Some of them already know the value about what you bring. And after the first two or three of these, they get much easier.
“It’s not my call anyway.” You may not have the authority to go outside of the firm’s rate card or chargeable rates for you and your team. But the scope for what you price in IS within our control.
And notice what the client is actually saying. When someone asks whether we can do this cheaper, we hear that our price is too high. What they’re really saying, most of the time, is that they can’t yet see what they’re getting for the money. Those are two different problems.
Let’s see what happened to Faisal. One of his best clients asked him to act as a part time Finance Director and coach. Two days a month. Faisal had seven hundred and fifty pounds a month in his head, and a feeling he was probably under pricing himself. His coach asked him a different question. What would it cost this client to solve this another way? A franchised business coach plus an outsourced finance director would have cost that client upwards of two and a half thousand pounds a month. Faisal quoted two thousand four hundred and seventy five plus VAT. The client agreed on the spot.
The scope of work was identical at both numbers. The difference is that before he priced it, Faisal worked out what it would cost the client to get the same outcome somewhere else. By consider the other options for the client it helped him get out of his own head.
We had a similar situation. I was asked by my colleague to help price a large transformational piece of work. It was top end stuff and a fascinating project. When my colleague first suggested a figure it felt large. So I asked her, how could the client do this work another way? They said they could hire an interim and do the project with them. This would have been significantly cheaper than using my colleague. At this point, we both realised we needed a different way to price this project and defend the value she would bring.
So here’s the question to ask yourself before your next fee conversation. Not “what will they pay?” but “what does this cost them if they don’t do it, or if they do it some other way?” This will help you determine both your overall fee but also how you price it.
If that’s the bit you struggle with.
The you quote to your client is capped by two things. What you believe the work is worth to the person buying it, and what you believe you’re worth doing it. Working off a script isn’t going to overcome the dialogue in your head that may be sabotaging your price. Whilst working on this won’t stop clients pushing back on price, it does at least mean that when they do push back, you have grounds to negotiate.
Now, if you’re thinking, “I understand all of this, I just can’t make myself do it when I’m sat in front of the client”, that’s exactly what part two is for.
It covers:
- why your own self esteem puts a ceiling on the fee you quote, (and 5 tips to improve your self-esteem)
- how your client is actually taking the decision, (and what you can do at a brain based level to influence this before you even talk about pricing)
- and what you can do to raise the value of your work in their head before quote a fee
Once you understand the mechanics of this at a brain based level, you’ll feel more confident pricing your work at a level that means you can make a healthy profit or recovery on the work.
I’ve popped a link to our Progress To Partner Academy, which contains part two of this episode, directly in the show notes for this episode. Also in the show notes, you’ll find links to my books, Poised for Partnership and How to Make Partner and Still Have a Life, so you can easily find them on Amazon. And as a thank you for listening, there’s also a link for a 10% discount on annual membership for our Progress To Partner Academy using the code PODCAST10.
That’s all for this episode of the How to Make Partner podcast. What’s your action for this week? Go back to the last fee you quoted, or the last time you wrote off your team’s time rather than have a conversation about it. Write down in one sentence what you were afraid of if you had quoted at the right level.
If you have enjoyed this episode please leave us a review on Spotify or Apple Podcasts or give us a comment on Substack. This helps us get the word out to others who may need this advice too. Remember to hit subscribe so you don’t miss next week’s episode. Thanks for listening!
I’m Heather Townsend, author of Poised for Partnership and co-author of How to Make Partner & Still Have a Life. I’m the leading global expert in what it takes to move from senior fee earner to partner – and when you get there, stay there. Here are 5 ways to work with me.
What help is out there for you
If you’re thinking, ‘This all makes sense, but I don’t have the time or the data to work any of this out properly,’ our Progress To Partner Academy can help you.
Take the Partnership Readiness Assessment
Free to complete, 10 to 15 minutes, and gives you a personalised report across all 12 key indicators. Take the assessment here.
If the Partnership Admissions Process is what is in front of you, this section of Progress to Partner will help you go into it prepared rather than hoping.
Use code PODCAST10 for 10% off annual membership. Click here to join.
Books mentioned
Poised for Partnership by Heather Townsend – https://amzn.to/3ETEYk3
How to Make Partner and Still Have a Life by Heather Townsend and Jo Larbie – https://amzn.to/4iLxugM
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