This is going to ruffle a few feathers, but think about it. You quote a fee, everyone signs up. You raise your fees, everyone stays with you. You keep raising fees and everyone still sticks with you.
What’s wrong with this picture?
It’s good, isn’t? On a small scale, maybe, but over time, it probably means you are charging a lot less than you could. Less than the market will bear.
Which is why you should regularly increase your fees.
You’ll lose some clients, but more than make up the lost revenue, and then some from the ones who stay.
That’s the idea, at least.
One consultant who recommends regular fee increases says that if 60-70% of prospective clients, or more, sign up when you quote your fee, you’re probably charging less than you could. Raise your rates and let the market tell you how much it will pay. And keep raising them until the market tells you “enough”.
How much should you raise them? Well, the stock market averages 9% per year, so if you only increase your rates by that much, you’re only keeping up. You’re not growing. And then there’s inflation.
But don’t let your minimums be your maximums. You might be able to increase your rates much higher than you think. How long since you last raised them? What percentage? How much resistance did you get?
You might be able to bump your rates 25%, 50%, or even 100%.
Prospective clients don’t know how much you used to charge. Raise your rates. If 3 clients sign up, says the consultant, raise them again.
What about existing clients? They do know how much you used to (currently) charge and might resist an increase more than prospective clients who don’t know what you used to charge.
Or they might not.
In fact, they are arguably less resistant to higher fees because they know you’re worth more.
Prospective clients often talk to other lawyers and compare your rates and services to theirs before they make a hiring decision. Your existing clients probably aren’t doing that. If they’re happy with your work and the results you’re delivering, they are more likely to pay those higher rates.
So, make sure they’re happy with your work.
At some point, you will meet resistance to fee increases. Some clients will pay them, some won’t. Or can’t.
Selling legal services isn’t as simple as selling groceries, but supply and demand is always a factor. The market will tell you what they will and won’t pay.
But only if you ask.
