This month at CVS, ExtraCare savings include $0.50 off Dove Chocolate Dipped Fruit, $0.25 off 1-gallon of milk, and $2.00 off Alkaline Batteries—discounts that keep going and going.
Wouldn’t it be nice to have the same percent off attorneys’ fees, or coupons for half-price on your next court case
According to a recent ethics opinion, apparently you can.
The American Bar Association (ABA) declared that ethics these discount deals may be structured in two ways:
- First, in coupon deals, a lawyer can sell a $25 coupon, for example, at a 50 percent discount on up to five hours of legal services.
- Second, in prepaid deals, a lawyer can charge $500 for up to five hours of legal service, a value of $1,000.
If the money is collected up front by the marketing organization—along with some information—than there’s no problem.
Nevertheless, the ABA Standing Committee on Ethics and Professional Responsibility warns about these coupon deals, stating in Formal Opinion 465:
“The committee has identified numerous difficult issues associated with prepaid deals, especially how to properly manage payment of advance legal fees, and is less certain that prepaid deals can be structured to comply with all ethical and professional obligations under the Model Rules.”
It’s not just the ABA that’s concerned.
Lawyers are also concerned that price equals value—that clients will believe the quality of services rendered were as low as the bill for them. Lawyers suspect clients will become accustomed discounting and will eventually refuse to pay full-price for attorney’s fees or choose alternative representation in the event these fees rise.
However, discounting can be an important strategy for attracting new clients or retaining old ones in a competitive market. With an overabundance of attorneys today, this type of corporate strategy of price differentiation is key.
Luckily for lawyers, however, times are looking up and fees are going up with them.
According to a Law Watch Managing Partner Confidence Index survey, confidence in the broader economic, and particularly in business conditions for the legal profession, has increased.
“A lot of the discounting pressure that we’ve seen over the course of a number of years now, post-recession, has been driven by the fact that there’s not enough legal work to go around,” explains Citi senior client adviser Gretta Rusanow to The AmLaw Daily.
“So, where firms have excess capacity, they are more inclined to discount their fees in an effort to keep their lawyers busy.”
Increased confidence in the market is a good sign for lawyers.
In the end, whether you firm decides to discount or not, managers should emphasize the following to clients:
1. Evidence of the value
Have a new client one-page summary sheet that lists your firm’s case wins, satisfied client testimonials, and the profiles of your qualified employees. Provide a short cost-benefit analysis that shows your fees are appropriate, as well as important to stave off the possibility of higher costs in the future.
2. Consistency in work product
Consistency equates to quality. Provide regular case matter updates, personal and electronic communication, and billing. Clients are less upset by invoices that they are already expecting.
3. Confidence in the future
Increased confidence about the market or the future of the field of law is good news on the whole. But, retaining confidence in the high quality of your practice will also help your firm retain its clients.
The economy is uncertain. But, with comprehensive and confident work on a client’s case, your performance doesn’t have to be. Even if your clients are coupon-cutting, a law firm’s value is created by a rock-solid reputation, time-proven results, and high human capital—not simply the price tag.
The advent of pricing managers at law firms has created a bevy of metrics on cost and profitability, and savvy clients want to see it!
How much detail should your firm share? Is sharing a profitable marketing practice, or will it cut into your firm’s bottom line? Our panel of experts will address these questions, and more during this practical pricing event.
Pricing is one of the most important factors in a client’s decision-making process when choosing a law firm. Failure to understand the clients’ often unspoken requirements perpetuates pricing shortcomings and lowers profitability.
Take C4CM’s course, “How to Use Pricing Metrics to Win and Keep Legal Clients,” on Thursday, January 28, 2016, at 2:00 PM Eastern.
- During this information-packed webinar, you will learn:
- Why pricing must be a part of your marketing strategy,
- How to use the metrics you already have, and
- Steps to align pricing strategy with your firm’s broader strategic objectives.
The course includes:
- How to set cost and profit objectives, and determine what value customers perceive in your product and how willing are they to pay for it?
- Ways to include competitors and similar products in the pricing mix, and structure accordingly
- How top firms are tracking and sharing data in a manner that satisfies client needs
- Explanation of how clients use price as an indicator of quality
- Methods your firm can use to make sure data drives the right kinds of discussions
- Why more firms are engaging in rate negotiations for pricing of individual pitches and proposals