Pricing Legal Services
This advice could literally add tens of thousands of pounds in profit to your bottom line profits; ie money that can come straight out to you in partner drawings or profits. It is tried and tested and it works. This is a genuine and excellent way to increase the profits of your practice. I should charge you for this advice, it is so sound and so good that it works every time. However, my business is based on giving you good advice to grow your practices and this is some of the best advice I have given away for free.
The Best Things In Life Are Free
I have put this method into play in many different firms from small private practices to large commercial law firms. This advice applies equally to large firms as it does to sole practitioners. It applies whether you are in London or Manchester, Padstow or Preston.
So what is this sound, sensible and achievable advice? The answer is very simple: – charge more for your services. It is easy to say and even easier to do.
What do I mean and how do you achieve it? Let me give you some examples – and I ask only one thing:- when you apply these techniques to your practice and you see your profits increasing (which they will), please remember who gave you the idea and send me a very short email letting me know how well it has worked for your law firm.
When you do this, I will give you another piece of advice to increase your profits even further still.
How Do You Charge More?
Let me start by giving you the basic principles behind this method. Start from the position of your expertise and knowledge. Do you believe that you provide a good service? If you are a conveyancer, do you believe you look after your clients better than your next door competitor? If you provide commercial services to SME’s, do you think your practical advice saves your clients thousands of pounds every single year? If you offer Wills and Wealth advice, how much do you save your clients every year on Inheritance Tax liabilities?
I hope and I am confident that most of you believe in what you do and believe that you provide an excellent service. When I started practising 17 years ago I knew I would do the best I could for all of my clients. I know I achieved many great results when I should not have done because I tried harder and worked longer than some others. I am sure a lot of you reading this are the same. If you fundamentally believe you are very good at what you do, shouldn’t you be rewarded for this?
How Much More Can I Charge?
Your service is worth as much as anyone is prepared to pay for it, added to that that it should be a sum that is good value for the client and a good fee for you. Only when both match does this work.
However, more often than not I see lawyers who are excellent at what they do but who do not have this commercial sense and hugely undervalue their service.
If you are good at what you do then you deserve to be paid accordingly, but how much are you worth?
Again, a seemingly hard question, but a really easy one to deal with as it is not your question to answer. Do not let any of your self-limiting beliefs stop you from charging more:- let the market tell you how much you can charge.
If you currently charge £500 for a service, test out charging £550 for that service. If your hourly rate is £150 or £175, start charging £200. If you charge £100 for a will, stop practicing law and start selling ice
creams, you will make more profit. I know will writing companies that charge on average £350 for a basic will, yet I see solicitors constantly undervaluing their professional services because they believe clients will not pay more. Please let me assure you if you believe this, you are wrong. Please let me repeat this:- YOU ARE WRONG! So let the market determine how much you can charge by increasing your prices until you reach the point below.
How Do I Start Charging More?
Hopefully I have now convinced you that you are worth more than you are currently charging. So how do you do it?
The simple starting point is to ask for more, and then use the salesman’s best weapon, silence. If your client or prospective client thinks your fees are acceptable, they will let you know. However, if you keep on talking and justifying your fees after giving the figure you put doubt into their mind. So quote your new fees then wait for a reaction. If the client is happy to pay these fees they will say so. If they are not, we move onto step two.
You will know from your own experience the most common complaints you have received about your charges, so do you have by your telephone a list of answers to these questions? If not why not? If you already know the likely objections, you can prepare a response when you are not under pressure that you can use when you are. Selling your services does not have to be hard, and if you prepare properly it is not hard and you will earn considerably more in the way of profits than you are currently earning. Having your ready prepared answers to all potential complaints about your fees puts you at ease and allows you to answer all questions raised and justify your fees.
When Do I Stop Increasing My Fees?
I have mentioned Vilfredo Pareto many times before in my seminars and in my newsletters. He is responsible for “The Pareto Principle”, also known as the law of the vital few and the 80/20 rule. It applies to so much in business: such as I know that 20% of your staff earn 80% of your fees, that 20% of your clients produce 80% of your income. More importantly, if you keep asking for increased fees, only stop when 80% of your potential clients complain about the level of your fees. Let your clients tell you how much more you can charge. Only when most of them feel you are too expensive do you stop charging more. I have seen conveyancing firms increase their charges by at least 50%, solicitors charging for wills increase their fees by more than 300% and commercial firms increase charges by more than 200%. So charge as much as you are worth, as much as your clients are prepared to pay, and enjoy the benefits of your hard work by increased profits. As the adverts say, “Tax doesn’t have to be taxing” and please let me assure you, “Solicitors making more profits doesn’t have to be difficult”.
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