Free · four questions · sixty seconds · no email required
How much pricing power does your firm have?
Most managing partners have a well-founded instinct about whether their fees have headroom. This puts a number beside the instinct, in sixty seconds, so it can go into the partners' meeting as a figure.
The Pricing Power Score
Four questions. Sixty seconds. A number worth taking into the partners' meeting.
Three questions on how your firm prices and holds its fees, one on the scale of the firm. You get a score out of 100, a reading of where the firm's pricing position stands, and a figure in pounds for what holding a 10% rise would be worth to a firm your size. No email, no sign-up. The score is yours either way.
How the score works
Pricing power is a firm's ability to hold its rates when a client pushes back. It is decided less by the rate card than by three things a managing partner can already see, and the score reads those three. Each answer scores between 20 and 95. The three are weighted and added to give a number out of 100. Nothing else goes into it.
Rate headroom, 35%
What would happen across your client base if rates rose 10% at the next review. The highest score goes to a client base that would accept it without comment. “We have not tested it recently” scores lowest, because a rate the market has not been asked to confirm is a rate nobody yet knows.
Rate integrity, 35%
How much of last year's billing went out at full standard rate, with no discount to win the work and no write-off to close it. This is the price the firm achieved, as distinct from the price on the card. Where realisation is not reported by matter or partner, the figure counts as not yet measured and scores towards the bottom of the range.
What keeps your best client, 30%
If your best client put the work out to two credible rivals, what would keep them with you. Expertise the rivals do not quite match holds a rate best. Trust in the partner and the team comes next, then the cost of moving, then price. A client who stays for the rate stays for as long as the rate is the lowest.
The four positions
- 80 and above: you set the price.
- 60 to 79: you hold the price.
- 45 to 59: the price is negotiated.
- Below 45: the market sets the price.
Each describes who sets the rate today. It is a position, not a verdict, and positions move. The lowest band carries the most headroom of the four.
The figure in pounds
The fourth question asks for two numbers: how many fee earners the firm has, and its blended charge-out rate. The figure is what holding a 10% rise would be worth to a firm that size in a year:
fee earners × 1,100 recorded hours × blended rate × 10%
1,100 hours is about five recorded hours a day across 220 working days. Ten fee earners at £300 an hour gives 10 × 1,100 × £300 × 10%, which is £330,000. Check the arithmetic. It is meant to be checked.
What the score is, and is not
It is a reading from four self-scored answers, taken in sixty seconds. It is directional: it shows where to look, not what you will find there. No email and no sign-up, so the score stays with you. Turning it into evidence means measuring the firm's own billing data.