{"id":3774,"date":"2005-04-21T23:55:34","date_gmt":"2005-04-22T03:55:34","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/formerlyknownas\/2005\/04\/21\/ron-baker-sensitive-guy\/"},"modified":"2011-08-05T14:57:46","modified_gmt":"2011-08-05T18:57:46","slug":"ron-baker-sensitive-guy","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2005\/04\/21\/ron-baker-sensitive-guy\/","title":{"rendered":"ron baker: sensitive guy?"},"content":{"rendered":"

I<\/strong><\/em> don’t know the private personality of value-pricing guru (and hourly-<\/span><\/span><\/span>billing nemesis) <\/span>Ron Baker<\/span><\/a>, <\/span><\/span><\/span>but he sure does care about <\/span>price sensitivity<\/span><\/a>.<\/span><\/span><\/span><\/span> As I discussed in <\/span>a post<\/span><\/a> two days <\/span><\/span><\/span>ago, Ron left a <\/span>Comment<\/span><\/a> asking me to<\/span><\/span><\/span> read his work more thoroughly, before <\/span><\/span>concluding that he’s insensitive to<\/span><\/span><\/span><\/span> the ethical aspects of value billing and premium <\/span><\/span>pricing by lawyers. <\/span><\/span><\/span><\/span><\/p>\n

\n

\n

\"RonBaker\"<\/span><\/span><\/span><\/span><\/span><\/span> Yesterday, <\/span><\/span>while waiting to see whether Ron would send me a copy <\/span><\/span><\/span><\/span>of his latest tome, I<\/span><\/span> clicked on a link from my Referer Page to the<\/span><\/span> Google<\/span><\/span><\/span><\/span> query [Ron Baker <\/span><\/span>hourly billing<\/em>], and instantly <\/span><\/span><\/span><\/span>came upon his articles<\/span><\/span> “<\/span>Hourly Billing Limits Profitabilty<\/span><\/a>” and “<\/span>Pricing Strategies<\/span><\/a>” (SmartPros<\/em>, Jan.<\/span> 2000), which eventually led me to a few other articles and then back to his book<\/span> The Firm of the Future<\/span><\/a><\/em>. I thought that many of Ron’s analogies and examples<\/span> were inapt (e.g.<\/em>, airline tickets, insurance policies, mortgages) for pricing<\/span> strategies to be employed within the special relationship of lawyer and client<\/span> for the provision of legal services — especially to the less-sophisticated client.<\/span> Mostly, though, I was struck by the centrality of price (in)sensitivity in Ron’s <\/span> pricing strategy, as he campaigns against hourly billing and its “limited” profits. <\/span><\/p>\n

\n

\"\" Baker advises professionals to maximize their “leverage<\/em>” over each client, maneuvering so that the client is far less price-<\/span>sensitive. This allows the professional to charge “premium fees,” <\/span>well over the amounts that would be yielded using the billable<\/span> hour method, resulting in increased profits (and<\/em> more leisure time<\/span> for the professional). This is apparently Ron’s ethics-sensitive<\/em><\/span><\/span> alternative to client dissatisfaction with hourly billing. His position <\/span>is justified with a self-righteous condemnation of the billable hour<\/span> system itself (rather than its abuse or the profit motive that fuels its <\/span>excesses) as unethical. His definition of “value” is no longer the<\/span> provision of a quality product at a reasonable price, but instead <\/span>the provision of services at whatever price can be leveraged out of<\/span> the client. The professional gets significantly richer and the client <\/span>gets the subjective feeling<\/em> of receiving more value. <\/span><\/p>\n

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\"hat So, yes, I’ve read more of Ron Baker’s teachings, and I’m even<\/span> less convinced that “what-we-can-get-away-with” is an appropriate <\/span>pricing strategy and ethos for lawyers. I’m also amazed by the ethical<\/span> blindness created by the glow of pots of gold. <\/span>Lord, please save the<\/span><\/span> client from such professionals, such ethics and such fiducial protection!<\/span> <\/span><\/span><\/span><\/p>\n<\/blockquote>\n

\"\" <\/span><\/em>click here<\/span><\/em><\/a> to see excerpts from Ron’s writings on the subject <\/span><\/em><\/span>of price sensitivity, <\/em><\/span>leveraging and premium pricing in the context of so-called value pricing; some <\/em><\/span>editorial <\/em><\/span>annotation <\/span>is also supplied. You might especially check out Mr. Baker’s <\/span><\/em><\/span>proposed use of the Change Order<\/strong> to “leverage” premium fees from clients who <\/span><\/em><\/span>have signed a Fixed Fee agreement. E.g, in <\/span><\/em>“<\/span>Change Orders: What a Concept!<\/span><\/a>“,<\/span><\/span><\/span> Ron says:<\/em><\/span><\/span><\/p>\n

“A favorite way to make the client <\/span>insensitive to premium fees<\/span><\/em><\/span> is the use of Change Orders <\/span>when services are needed beyond<\/span><\/em><\/span> those covered in <\/span><\/em>the initial fixed-price arrangement [no kiddies,<\/em><\/span><\/span> pricing can’t really all be done up front]. “<\/em><\/span><\/span><\/p>\n

\"\"<\/a> Ed. Note<\/em><\/strong>: In addition to adopting a more guru-new-agey image, Baker has taken some of his most frank, troublesome, avaricious phrases out of articles mentioned here at f\/k\/a<\/em>.\u00a0 In some instances, the version quoted is no longer available online, and we’ve had to link to subsequent, scrubbed versions.<\/p>\n<\/blockquote>\n

\n

for the fat green from<\/span>
\ncrouched on the log
\ntime is flies<\/span><\/span><\/p>\n

<\/span><\/p>\n

…………… by <\/span><\/span>George Swede<\/strong><\/span><\/a><\/span><\/span><\/strong><\/span> from <\/span>Almost Unseen<\/span><\/em><\/a><\/span><\/span><\/p>\n

\n
\n

in my thicket<\/span>
\nthey’re out of time…<\/span>
\nfireflies<\/span><\/p>\n

\n<\/blockquote>\n

cherry blossoms–
\nresidents of this world
\na short time<\/span><\/p>\n

\n<\/blockquote>\n

spring mist–<\/span>
\npeople without hoes<\/span>
\nwasting time<\/span><\/p>\n

\n

……………………………. from <\/span>Kobayashi Issa<\/span><\/strong><\/a>,<\/span> <\/span><\/span>translated by <\/span>David G. Lanoue<\/span><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

I don’t know the private personality of value-pricing guru (and hourly-billing nemesis) Ron Baker, but he sure does care about price sensitivity. As I discussed in a post two days ago, Ron left a Comment asking me to read his work more thoroughly, before concluding that he’s insensitive to the ethical aspects of value billing […]<\/p>\n","protected":false},"author":94,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[2926],"tags":[],"class_list":["post-3774","post","type-post","status-publish","format-standard","hentry","category-pre-06-2006"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p6kP1R-YS","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts\/3774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/users\/94"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/comments?post=3774"}],"version-history":[{"count":1,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts\/3774\/revisions"}],"predecessor-version":[{"id":13252,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts\/3774\/revisions\/13252"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/media?parent=3774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/categories?post=3774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/tags?post=3774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}