October 5, 2005
Value Curve for Law Firms
William (Bill) C. Cobb, http://www.cobb-consulting.com, invented the Cobb Value Curve (See Attachment). His work has explained and guided law firm pricing for over a decade. Most recently the Value Curve was cited and included in the
It illustrates that the value of legal services (and price legal customers are willing to pay) vary greatly depending on the nature of the customer's need. “Bet your company or your life” issues are at one end of the scale and transaction style services are at the other. What is often not as clearly understood are two important points:
- The opportunity for substantial per-partner income exists regardless of where on the Value Curve a law firm operates.
- What the law firm is selling and their mode of operations has to vary greatly in order to realize the per-partner income potential.
At the nuclear event (or “bet your company”) end of the scale, nothing matters except the skill of the lawyer. Price doesn’t matter. Business often goes to the celebrity attorney or powerhouse law firm. On the other end of the scale, buyers care nothing about who is doing the work. One legal professional is equal to another. The law firm is no longer selling experience or skill. What they are selling is process, procedure and service—all based on their ability to provide the transactions at a lower price due to advantages acquired by efficiency, technology and cost of labor.
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