PRACTICE MANAGEMENT

“EVERYONE WANTS LOWER FEES. HOW DO I NEGOTIATE SUCCESSFULLY?”

April 2011

Several lawyers have said to me “Fees are a real issue. Clients want more for less; cannot understand why they have to pay so much; try to reduce our initial quote; argue about the final bill; and then, to cap it all, delay paying their bill. What can we do about it?”

Considering each of the negotiation problems in turn.

Problem: Clients want more for less.

Possible Solution: put your head into the head of your clients and potential clients and see it from their perspective

For clients thinking about writing a Will, a solicitor who charges £25 less than another, may be appealing. Every pound is perceived as coming straight from their pocket to pay for something that they may not want to think about and they will not even be alive when it is needed! They are not going to benefit from it so why pay £25 more?

You are now competing with high street stores; “off the shelf – DIY wills” and on-line Will kits. Retail shoppers are used to “money-off-deals”; “two-for-one offers; and coupons.

If such shoppers have little experience of lawyers, then your “products” are being compared directly with other retailing products, rather than other professional services.

Starting from your client’s perspective will help you negotiate successfully.

Problem: Clients cannot understand why they have to pay so much.

Possible Solution: find out what is valuable to the client and explain what you do in terms of what is valuable to them

Clients will only value what matters to them, not necessarily what is intrinsically valuable. Therefore, in order for clients to appreciate the value you give, you need to find out what they value, and put your service in their terms.

You can find out what clients value, by asking open questions. This should happen even when somebody is telephoning around for a quote on how much you charge for writing a Will; creating a Trust or Dealing with Probate. So, even if you charge a flat fee for any of these services, ask open questions, which will help you to determine what this client is worried about or cares about.

Simple questions can help you to phrase your answers, to demonstrate that your fee will give value for money and help you negotiate successfully. For example, answers to the following questions will help you to learn what your potential client values: “Have you written a Will before?”; “What has made you think about writing a Will at this time?”; “What particular issues would you like it to deal with?”

Answers to all these will help you to learn about what the clients value, which may include the following and you need to demonstrate you will deliver it, in order to negotiate successfully:

Certainty: clients want to know that they will be able to leave all their affairs in order, if they are writing a Will. They may want to know that a Trust is watertight. They may want no difficulties with Probate.

Demonstrate your appreciation of their need for certainty and order, by keeping your promises and doing what you say you will by the time you say you will. If your clients have to keep telephoning you and asking what is happening, then you can be certain that they will be telling one of the 18 people, that research has shown that clients will complain to, before they complain to you. Provide reassurance, “We will keep you informed at each stage, which means that you will be up-to-date with everything as it progresses.”

Speed: you can explain what you will do to make things progress as fast as possible to achieve their objectives: whether dealing with Probate, writing Wills, or setting up a Trust. To give the feeling of speed, you can explain what you will do to ensure that everything happens as fast as possible. Use words and phrases such as “fastest”; “quickest”; “soonest”.

For example, “We know the local Probate office well and have dealt with them for years, which means that we can present the documents in the way they prefer, which will ensure that we have it as soon as possible.”

Understanding what is involved: This is one of the biggest stumbling blocks for those who are not familiar with instructing solicitors. Your explanations of what happens at each stage, and what you will do at different points, needs to be simple and clear, but illustrate the complexity and intricacy of what is involved. This will give an appreciation of the value of what you do and why your input is important, so helping negotiations.

Ask your clients how much experience they have of using lawyers or of the particular matter they are asking you to deal with. Check their perception of what they think is involved in the process. Clarify with the client how long they think that things will take: ask them first and then modify any misconceptions.

That you care: take a person’s name and telephone number even on an initial cold call; use their name throughout the call. Agree that you will ring them back to see if they have found a suitable solicitor. Ask why they did not instruct you, if they did not. This will give you great feedback which will help in future negotiations.

Your clients want to know that you are on their side, will fight their corner; look after their interests and be pro-active in making suggestions that they would not have thought about.

You can include all these when discussing fees and demonstrating how they will receive value for money which may reduce their inclination to negotiate.

Problem: Clients try and reduce the initial quote

Possible Solution: Reaffirm what they value and what they want from you

You can use the closed question technique, with three “Yes” answers which helps people to value what they are receiving and you can help them to appreciate your value. A hypothetical example might be, where you are gently confirming what they want:

“You want to be sure that you that this Will cannot be challenged successfully?” “Yes”

“You want to be sure that your children inherit all your money.” “Yes”

“You want to be sure that your brother does not inherit anything” “Yes”

Problem: clients argue about the final bill and want to negotiate again.

Possible Solution: itemise your quote and if necessary agree staged payments to reduce risk of negotiations at the end.

A large bill becomes easier to pay, if it is broken down into its constituent parts, and paid in those smaller parts at regular intervals. Avoid arguments about the final bill by being clear, transparent and structured in the initial quotation and ensuring that the client agrees these items. Ensure that you are clear initially whether you include VAT or not, and how additional expenses are treated. The more expectations are clarified and agreed at the start the less likely that there will be arguments at the end.