Most attorneys don’t charge enough. There are several reasons:
- They try to match their rates to what other lawyers are charging, so they can “stay competitive”
- They believe they will get more clients by offering rates somewhat lower than other attorneys
- They haven’t factored in the costs of overhead or inflation
- They start out low and are afraid that if they raise their rates they’ll lose clients
Here’s reality: the best clients don’t shop around for the lowest priced attorney, and you don’t want the ones who do. Don’t compete on price. You’ll attract the worst clients, and besides, there will always be someone who charges less than you, and that’s a slippery slope leading to bankruptcy.
The best clients — the ones who return again and again and refer others — understand that you get what you pay for. In fact, if you charge less than most other attorneys, you’ll actually make your clients nervous. What would you think if you found out that the doctor who was about to operate on your brain charged much less than other surgeons. Wouldn’t you want to know why?
Low fees will often lead to fewer clients, not more. You don’t want a reputation for being “low priced”. Instead, you want clients to think of you as “charging top dollar but worth every penny.” In this way, you get the better clients and maximize your revenues and profits.
I recommend that you regularly review your fee structure so that you at least stay in the upper third of fees in your area. You don’t have to be the most expensive in town to get the best clients (although that may be an effective strategy), but you do want to be among that group.
Will you lose some clients as you raise your rates? Yes, but far fewer than you might imagine, and the revenue lost will be more than compensated for by the gains from remaining clients.
And, you may find that by raising your rates, demand for your services increases. More clients at higher rates? That would be okay, wouldn’t it?
