Negotiating Fees with confidence
Twenty years ago a solicitor presented a bill to the client and the client paid it. Those easy days are now long gone and clients want to negotiate discounts at the start, again at the point of billing and often one final time after the bill has been delivered. Sophisticated clients are going on courses where they are trained how to negotiate fees so perhaps it is time for solicitors to think again about some more education in this area.
So what can be done? The following is a quick summary of things to think about before going into a meeting where fees might be discussed:
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- The client actually needs your help – if they didn’t then they would not be here. So try to focus on their problem and why they need your help rather than the fact that you are not as busy as you might like.
- You don’t have to do this work – there is a price below which you do not want to go which in other industries would be called the “walk away point”. Be clear in your mind about this point as when a client pushes you closer to this point you will naturally apply pressure to allow more headroom above the walk away point. Without a walk away point it is too easy to agree to do the work at an uneconomic rate.
- Be brave and start high – when you are asked to quote start high. Whatever you say the client will try and talk you down. If you start low you will probably end on the floor but if you are brave, and start high, you might make a profit.
- Say what you can do – It is seen as negative if you just dismiss a fee suggestion from a client so be honest but make sure that you make a positive counter offer to keep the negotiation alive.
- Offer something other than a discount – you may be able to offer something else instead of a fee cut. Examples of other things would be training, some other free advice or know how or a discount on the next piece of work.
- Think twice before “splitting the difference” – it is very tempting to strike a deal by offering to split the difference. If you don’t and you sit tight then the client will want to end the haggling and is likely to move closer to your offer. Nobody enjoys this negotiating but the person who is willing to endure it for longest usually ends with the best deal.
- Silence can be golden – try to remain silent and let the client revise their suggestion. If you keep talking you will keep reducing your price and the client will just accept it.
We are experiencing very difficult times but they are only going to get worse if we don’t make sure that we are properly prepared for our fee discussions with clients.