Discounting Your Legal Fees?
During tough times, clients like bargains and discounts, but they also like quality and certainty. Discounting your legal fees may be a question you start to hear more.
Many clients have come to expect discounts as a “new” part of the business process and have no trouble asking for them. Your potential clients may be nervous, tightening their spending and shopping around for the best price, but selling on price alone comes at a cost. There is a dark side of discounting your legal fees.
There’s no doubt that cutting your fees could provide you with a quick profit and occasionally improve overall profits. Discounting might help to win business and attract new clients in the short-term, but from a strategic perspective, it can have an adverse impact on your law practice. It’s important to consider the potential consequences of lowering your fees. Slashing fees can lead to encouraging clients to ask for discounts every time they engage your services.
Every industry is becoming more competitive, and your clients are taking a closer look at what your competitors have to offer. Is the new low-price competition stealing your customers away? The most challenging problem attorneys struggle with in today’s economy is how to defeat the competition without discounting your fees.
Part of the ongoing battle with competitors is on fees. They lower their fees, and you feel forced to keep up with them and reduce yours. There are different strategies involved in pricing that doesn’t always mean cutting costs. They do involve being more competitive.
Discounting your fees seems so innocent. But it can be tragic to your bottom line. What seems like a minor concession to win business often has grave consequences for your firm. Lowering your fees weakens your business, stunts growth and makes your practice more exposed to an attack by your competition. There is nothing stopping attorneys who choose to compete on price. You can always lower your price and close a few deals. But at what cost? If you want to sell more services, more profitably, to more people, you must resist the temptation to discount and begin focusing on value. As an attorney coach, I teach professionals how to create value that can be seen, not just giving lip service.
Instead of discounting, learn to build value for your client, so they don’t feel like they have to ask for discounts. After all, your willingness to give a discount may send a message that you don’t think the value is there. But if you must discount, get something of equal or greater value in return; perhaps a larger order, an accelerated payment schedule or some other concession.
Most clients who demand lower fees have not recognized the unique value that your solution. If today’s buyers are to pay more, they must get more. You defeat your competition by getting the best possible match between the strengths of your offering and your clients’ needs.
To attract and gain new clients, you need something dynamic and memorable to set yourself apart and not fall into the fee trap. If you think of yourself as offering a solution to a problem rather than offering the lowest price, then you’re well on your way to succeeding in business.
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Need a “911” Coaching Strategy Call? If you are struggling with closing business and keep running into the same business obstacles and issues, let’s chat.
This 911 attorney coaching call is not a free coaching call. That would be irresponsible of me to offer you, as change doesn’t happen overnight, and certainly, can’t happen on one phone call. Purely a chance for us to get to know each other, see where you are in your business, and see if it makes sense to work together. I want to serve you, and to do that, we need to have a frank conversation about your practice first.