[IMGCAP(1)]Imagine a firm that looked beyond traditional metrics to measure strengths and weaknesses -- a firm that discounted the hype surrounding "efficiency" and worked to provide services of real value to clients and a positive culture for staff. What would this kind of firm look like? Could it be a profitable and challenging place to work? Would it be a place to develop and nurture staff, where no one is expected to manually complete time sheets? This type of firm exists. In fact, I recently witnessed a "rebirth" of sorts of a large firm, and I want to share the story.
Just a few weeks back, I was invited to a party at Itasca, Ill.-headquartered Corbett, Duncan & Hubly, a large firm with about 60 employees. The invite, more specifically, was for a "Time Sheet Burning Party" -- a symbolic ritual to denote the firm's move to value pricing. While other large firms are still holding on to the belief that value pricing isn't a good fit, CDH understands that it is the way of today's leading firms, as well as smart practice management. Value pricing allows CDH to ditch time sheets and the hassle of tracking hours. But more important, it supports a pricing model that is based on the value of the service -- not the amount of hours put into it. I truly hope that this is a trend ... and that I get invited to more parties like this.
I want to also mention that the firm's "burning" ritual denotes something even bigger. It indicates a realization that "efficiency" is not at the heart of what makes a firm successful. Efficiency has become the big buzz word. And while it's important, what really allows firms like CDH to grow and prosper are things like continuing education, mentoring and coaching, and exceptional service -- all critical to pricing based on purpose. Accounting professionals are knowledge workers, and to be effective -- for the firm and for clients -- they must have continuous learning and development. These are the true measurements of effectiveness, and are more important than efficiency. These are the factors that support the value pricing model.
From a hiring perspective, it's also important to note that this is a huge gain for CDH. By removing the billable hour, the firm creates a more friendly culture and encourages innovation and teamwork.
THE VALUE OF COMMUNICATION
To give a bit more background, the firm started its transition over a year ago, ensuring that they first had the proper solutions and practices in place. Today, the final leg of the transition is in effect. They've notified clients of the pricing change and are standing behind it. They are also communicating clearly with clients about the necessity of the transition, expressing that, "We believe difference-makers inspire, innovate and improve our world. Those who choose to make a difference achieve more together. How can we work together to make a positive impact?"
CDH staff talked to their clients, holding a conversation on pricing with each. Firm leaders also created a value council to develop pricing options to present to clients, and worked through project management and potential scope creep. While I'm sure this journey has presented challenges, I know it's the right move for the firm, and I also know they handled the transition appropriately by keeping the client at center.
CDH staff have experienced a positive transition into the world of value pricing, primarily because they maintained a focus on the needs of their clients, and the value to the client. They also, from the very start, invited their clients on the journey with them. This is key, as it further enhanced the client-firm relationship. No one is saying it was all roses. In fact, some of CDH's clients may not have been a good fit for the new model. However, the good news is that, moving forward, the firm can onboard only clients that are a fit with its new way of doing business. And that means building the ideal client base.
For firms embracing positive change like value pricing, kudos to you! To those who are not, I say: It's time for you to have your own party!
Jody L. Padar, CPA, MST, is CEO and principal of New Vision CPA Group, as well as an adjunct professor at Oakton Community College, where she teaches taxation and QuickBooks courses. She is part of the Intuit Trainer Writer Network and speaks nationally on various technologies and taxation.
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