John Chisholm

Founder & Managing Director at John Chisholm Consulting

Value pricing expert

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John Chisholm is a lawyer and value pricing expert and an advocate for professional firms to depart from the traditional firm model which prices solely on time.  A former Managing Partner and Chief Executive of two leading Australian law firms, he compellingly runs through the many arguments for a move away from the billable-hour model - satisfied clients, more enduring client relationships, a collaborative culture, a more sustainable model, healthier lawyers, greater retention of talent, more robust financial position, increased trust and relevance in the business and wider community, and the list goes on.   

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Bio

Show notes

Links

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Bio:

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John Chisholm is a third generation recovering lawyer who, prior to establishing John Chisholm Consulting in 2005, was a Partner, Managing Partner and Chief Executive of 2 leading Australian law firms for more than 20 years. His time with those law firms saw them transformed into market leaders in their fields.

 

John established his own consultancy to share his expertise and experience with professionals looking to move beyond the traditional firm model which essentially leverages people x time x hourly rate.

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This has seen him become a leading advocate for professional firms to:

• move away from pricing their services solely by time;

• stop using ineffective performance management ‘tactics’; and

• implement alternatives to the partnership model including partner compensation.

 

For those firms willing to do so, the result is a knowledge firm rather than merely a product or service firm.

 

Knowledge firms have far happier clients and team members that are more committed, creative and entrepreneurial than traditional firms. They use a pricing strategy that is no longer limited by people or hours but linked to the value they create for their clients.

 

John also provides one on one coaching, mentoring and personal development to a number of professionals looking to move their individual practice to the next level.

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Show notes:

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• [02:14] John describes his journey from law firm Managing Partner to consultant, which he 'fell into' at first. We talk about the challenges of being an outsider advising law firm Partners.

• [08:04] John remembers his 'a-ha' moment when he encountered value-based pricing, after hearing the late Paul O'Byrne talk about it. 

• [12:04] The legal profession is stagnant on client-friendly pricing models, while the rest of the world innovates.

• [15:19] Billable-hour pricing leads to a production mentality, which demeans lawyers.  

• [17:39] The private profession is losing good people, especially women, who will vote with their feet away from an outdated model that damages wellbeing.

• [20:32] As John says, clients don't even buy lawyers' time, which is an input. They buy outputs, outcomes and value. And they want certainty.  

• [21:55] John answers my question on how law firms can move to a new model, away from the billable hour. 

• [26:56] Removing the billable-hour as a basis for charging clients can also mean a different way of measuring and rewarding lawyers' performance, from individual- to team-based metrics.

• [28:20] More advantages of value-pricing include how it increases cash-flow and releases management and Partner time previously spent on billing disputes.  

• [30:50] John challenges in-house counsel to participate in the push for law firms to innovate in pricing. Law firms also need more courage to lead.

• [34:48] John touches on the loss of trust the profession is facing due to our inability to adapt.

• [35:01] John predicts that global law firms will develop or merge into consulting firms which will see a business model shift.

• [36:22] John is moving his expertise into the subscription-model of pricing, an exciting new idea that already exists in many items we consume, and helps deliver more options and build stronger client communities for lawyers. 

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Links:

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John Chisholm Consulting:  www.chisconsult.com.au

Innovim Group, pricing consultancy where John is a director: www.innovim.com.au

 

VeraSage Institute, a think tank dedicated to promulgating and teaching value-based pricing, economics, and human capital development, where John is a Senior Fellow.

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The late Paul O'Byrne, an accountant who successfully implemented value-pricing in his practice.

Ron Baker, a world leader in pricing for professional services firms and founder of VeraSage Institute