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April 10, 2007

Picasso's Argument for Value Pricing

In Selling the Invisible by Harry Beckwith, there is the following passage:

A woman was strolling along a street in Paris when she spotted Picasso sketching at a sidewalk cafe. Not so thrilled that she could not be slightly presumptuous, the woman asked Picasso if he might sketch her, and charge accordingly. Picasso obliged. In just minutes, there she was: an original Picasso.

"And what do I owe you?" she asked. "Five thousand francs," he answered. "But it only took you three minutes," she politely reminded him. "No," Picasso said, "It took me all my life".

Don't try to guesstimate hours to get the work done and then map those to a particular price. Work backwards instead of forwards. Price by the value you bring to the project--which is a function of your years of experience (not just as a lawyer but as a human being) and unique talents. Don't price by the actual time you invest in the task as technology can reduce the actual time it takes to impart your 'value.' Understand this; because technology has reduced your time to accomplish the task it does not diminish the 'value' you bring to the task.   

And like the woman in the Picasso example, we have an obligation to break our clients of the habit of thinking in billable hours, too, otherwise we may hamstring ourselves when it comes to breaking free from the billable hour and educating them on a value model.

With technology, if you stick to 'selling time' you can go broke or overwork just to break even. If you break away from the hourly billable model and go high-tech you will be much more profitable and the client will be happier having also negotiated to pay the value he places on the task, which is equally important. You will feel freer, too, less invested in watching the clock, justifying every second of your day and spending precious minutes documenting those 'seconds' only to have them challenged or reduced by a judge.


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Richard A Schoor MD FACS

I like that. Wish it was possible in my world.

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