Lawyers: Post Peak Pricing and Love Island
What now… as the biggest rush on legal services in living memory is beginning to fade… When, like a newly released hostage, all you heroic Lawyers walk out, blinking in the sunshine and into the arms of near-forgotten family and friends…
Well, now, it’s most likely that the price for your services will be dropped quicker than a first-round Love Island reject.
I’m kidding, of course. After all, maybe you enjoy seeing a spotty estate agent in their first job after leaving school charging more than you?
In addition to spending too much on takeaways and being made to watch rubbish TV, I work as a coach – fixing revenue and profitability. So, here are my ten tips on managing the challenge of post-peak pricing:
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- Be brave & don’t drop your prices. You are worth it.
- The power of storytelling. Clients rarely understand enough about what you do or what value you can give when they choose a lawyer. Tell them the story of the work.
- Have a pricing strategy in each department. Train the team to follow it.
- Tell the bargain hunters who endlessly penny pinch to pay up or… ‘go elsewhere’. You do not have to win every client. The unprofitable files you have (probably) already worked on this month are most likely to have been for the clients you don’t like very much. Why would you do that?
- You can’t change what you can’t see. Sainsburys wouldn’t sell a tin of beans without knowing how much it costs. Why would a law firm set pricing without knowing the costs & profit in each file?
- Stop. Managing. By. Revenue Contribution. Again, it’s profit that matters. Don’t hide behind lawyers working all hours for a real hourly rate of naff all. It’s unhealthy for them and bad for your firm’s bank balance. Let them work all hours and bill more instead. Kidding again. I think.
- Manage by profitability – just like you’d file review against quality & risk, meet as a team & file review against pricing and profit. Make this a coaching style of conversation… not a telling off!
- Cross selling. Maximise the value, both from and for every client. Every department should have a cross selling plan – complete with mapped out processes and skills. Cross selling should be the rule, not the exception. Clients that buy from more than one practice will, on average, stay three times as long, spend twice as much and are six times less likely to make an official complaint. Its worth investing in.
- If you really do insist on being the cheapest, which could be a legitimate choice, try the following:
- Have a plan to use being cheap to win market share and then turn that market share into profit/market dominance (yet to see this in a UK law firm, but you never know…)
- Do the most basic of jobs. No frills, no fancy offices and minimal communication. Think Ryanair, but without the charm.
- Hire only the cheapest staff… make ‘em sweat and never give them a pay rise… I really hope that doesn’t sound familiar.
- Remember a ‘loss leader’ that does not ‘lead’ to something profitable is…. just… well…. a ‘loss’.
- Invest in technology & automation to reduce overheads. Actually I would argue that if you do that you’ll give a better service so could charge a premium.
- Sainsburys wouldn’t sell a tin of beans without knowing how much it costs. Yes. This one is in twice. Because it’s my favourite, and I’m worried people might forget.
From a commercial point of view, please don’t let the lessons of the last year get forgotten. It really is possible to keep the fees you charge aligned to the value you give – and go home on time…
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