Most expert practice owners don’t think too deeply about pricing responsibility. Instead, they default to assuming that the pricing function is automatically attached to a role (e.g., account manager, consultant) with everyone in that role having the authority to set price by default.

If you decide on this full decentralized model after careful consideration then I’m all for it. But there are three other models you should consider, as well as the idea that perhaps responsibility for the pricing function should shift over time. 

A Caveat

This guidance applies to firms using a customized pricing model where you price the client instead of the service. I wrote about this distinction in my book, The Four Conversations, and I discussed it with David C. Baker recently in the 2Bobs podcast episode, To Standardize or Customize?

First, Check the Numbers

The first point of consideration is the numbers, specifically the wide variance in prices and gross profit (GP) across all your pricers. The GP of your best pricer should be the standard across your firm.

Do the math: how much margin are you leaving on the table by letting everyone but your best pricer set prices?

Four Levels of Pricing Authority

I mentioned there are four models for assigning the pricing role1. They are really four levels of centralization. Let’s explore each of them. 

Fully Decentralized: Each client-facing team member sets price independently with minimal guidance or oversight. This is the default norm I mentioned at the top. 

Center‐Supported: A central pricing authority, like your best pricer or perhaps even a chief pricing officer or pricing council, acts like a consulting resource for client-facing personnel—providing tools, data, and best practices—with the client-facing individuals making the ultimate pricing decisions.

Center‐Led: Your central pricing authority sets guidelines, strategy and perhaps specific pricing recommendations, but individuals or teams still have some discretion to alter those recommendations. 

Fully Centralized: One entity sets price. It might be an individual (Chief Pricing Officer) or a formal Pricing Council, but they and they alone set price for everyone. 

There Are Pros and Cons to Each Level

I won’t delineate here what you can uncover with a simple LLM prompt (explain the four levels of pricing centralization, including the pros and cons of each). You can also listen to David C. Baker and I discuss these pros and cons in the 2Bobs episode that drops tomorrow (26 February 2025). 

Consider Evolving Through the Levels

I think firms that systematically underprice, over-serve and struggle with profit should look seriously at who is setting price and do a role reset. 

Move to centralized pricing (or center-led) at the reset then decentralize over time as certain benchmarks are met. 

Here’s an outline of how you might think about that:

  • Look at moving to fully centralized or center-led over the short term as a way of resetting the pricing function.
  • Centralize based on aptitude, not on title or seniority. 
  • Move to center-supported once certain price, margin or profit thresholds are reached.
  • Train everyone and let the top performers rise to the top. Consider them for some version of a centralized role where they will always be a resource to the other pricers.

While fully centralized might not be necessary, I don’t think fully decentralized pricing is all that wise. 

I think you owe it to your pricers to always have some sort of centralized resource or even authority. The pricing function is just too valuable to let everyone do it. 

The right to price should be earned, not assumed or assigned by default.

  1.  I’m unsure of where I first encountered this model of four levels of pricing authority. ChatGPT says the originator is Toby Brown, co-author of Law Firm Pricing: Strategies, Roles and Responsibilities. I’ve reached out to Toby to verify this but have not heard back. I’ve checked with Ron Baker and he is equally unsure of the source. When I get a definitive answer I will properly attribute it to the author. ↩︎