3 Keys to Raising Your Fees In ANY Economy

If you’ve been reading my Law Business Revolution Briefing Memorandum for any amount of time, you’ll know that I’m NOT a fan of hourly billing or you selling yourself short in the name of a “sluggish economy” or for any other reason.

I just had a laser coaching session with a lawyer last week who told me she didn’t want to build the kind of practice I had because she wanted to keep her fees low.  After talking with me though, she was able to see that not valuing the services she provides isn’t going to help her help more people, it’s going to run her into bankruptcy.

It’s heartbreaking to watch so many lawyers go out of business or not bring home enough bacon simply because they get trapped into thinking about their pricing the wrong way.

When you differentiate yourself based on price, you simply cannot provide value.  You end up competing on the wrong basis.

While price competitors have been in operation since beginning of time, it’s important to understand that if YOU want to build a sustainable, scalable and one day SALEable law business, a core foundational piece of that puzzle is that you are charging enough.

Is that possible in this economy?  Absolutely.

Let me shift your thinking outside the legal world and into the business world for a moment.  Stores that offer super low prices like Wal-Mart and Target are thriving in this economy.  So with that logic, you’d expect high-end stores like Nordstrom or Sacks 5th Avenue to be out of business right now…but they’re not.  In fact, Nordstrom’s profits more than doubled in the quarter ending Jan. 30 according to the WSJ.  Luxury cars like Mercedes and BMW also reported profits last year despite the fact that “no one has money to spend.”

And lawyers doing things the PFL Way are thriving, while charging much higher fees than their “competitors”. How can that be?
It’s simple, really.  People DO have money to spend… you’re simply not doing a good enough job showing them that your law firm is the best place to spend it.

You see, it’s all about the value.  And I’d suspect that you are not clear enough on the value you provide to convey it to your prospects.

This isn’t “blind theory” or Alexis Martin Neely’s random thoughts on life either.  I’ve done it, our Personal Family Lawyers® and Creative Business Lawyers™ are DOING it and so are millions of other small business owners/ entrepreneurs in this country right now.

So how are they doing it?  Here are some things you can do right now:

1. Stop Acting Like a Commodity.

Your prospects have no way to know if you are the best lawyer for them.  To regular folks, all lawyers are the same.  So when you compete on price, you’ll get price shoppers galore who see you as just like everyone else.   But, you are not like all the other lawyers, are you?

So, what makes you different?  And how do you show that to the marketplace?  That’s what you need to focus on and show the world.

2. Identify the Value of the Outcome You Provide.

Why can Nordstrom’s charge higher prices for products found elsewhere (i.e. cars, purses, ties, shoes)?  It’s because of the VALUE they’ve attached to their brand (i.e. social prestige, enhanced customer service, increased self-esteem).   They’ve moved themselves out of the commodity market and into the heart, emotion and primal urges of their clients.   You need to do the same thing in your law firm.  Yes, Mr. Customer can get an estate plan for $399 or set up their LLC for $750 or a bankruptcy for $1125 down the street, but what are they NOT getting when they work with that other firm or even worse go online to do it themselves?

3. Move Beyond the Billable Hour

There are only so many hours in a day and you’ll reach an income plateau very quickly when you are billing by the hour. Not to mention that you have to start every month over at zero and there’s absolutely no stability in that.  No matter what practice area you are in (with the exception of contested matters), you can begin billing on a flat-fee/value basis.   If you’re scared to shift, just think of the VALUE your customers will experience having an attorney using flat fee billing.  They won’t be nickel and dimed for every phone call, email and fax that comes through the office.  They can communicate with you as they wish without fear and they can pick their price point of choice if you have membership options.  And believe me, people are willing to pay more for certainty every time.  It’s a win-win for them– and it’s very much a win-win for the health/sustainability of your law firm.

Remember this:  People still have money to spend… even in this economy.  And they NEED your services.  It’s up to you to convey the intrinsic value of working with you (even at a higher price point) to command the income level you want…and rightfully deserve…this year.

PS- If you serve small business owners and want more information after reading this article on how you can participate in our Creative Business Lawyer Program and serve the entrepreneurial/business owner market using flat-fee, membership-based billing and differentiate yourself from all the other business lawyers out there, mark your calendar for March 18th at 12pm PT/3pm ET.  More details coming soon!

Related posts:

1. It’s Not the Economy; It’s the Experience
2. Give Your Clients the Red Carpet Treatment to Succeed in This Economy
3. What Your Legal Fees Say About You…And How You Can Change That
4. Kick-start Your Creativity in 3 Simple Steps
5. Cash Flow Management – It’s a Learned Skill