When law firms look for ways to increase their revenue, they usually overlook the most obvious strategy: Raise fees.
You’d be surprised at how much pushback I get from attorneys, when I suggest they are charging clients too little for their services. “I already charge more than my competitors!” “I can’t ask my clients to pay more.” “I won’t get as many clients if I raise fees.” The list of excuses goes on.
What if I told you that the fees you charge have nothing to do with your conversion rates? In my experience helping attorneys grow their firms, I’ve seen them raise prices time and again–while their conversion rates remain constant or even improve.
Why do so many lawyers undercharge for their services? I’ve identified at least three reasons.
This article in Entrepreneur.com explains it best: “The association between your product and the price you've assigned it most likely is not fixed in your consumers' minds the way it might be in yours.”
Consumers don’t buy on price; they buy on value. In your case, if prospective clients truly believe your firm gives them an unmitigated advantage, they will usually pay what you ask, even if it’s more than the other guy. Lawyers lose clients when they try to compete on price. They win when they convince the client they are worth more than they are charging—no matter the dollar amount.
Many attorneys believe a price increase would hurt their numbers, but in truth they don’t even know what their numbers are. How do you know you can’t charge more if you haven’t tested the market—and how can you test the market without knowing your numbers?
Implement a system to track your leads and your conversion rates, then try a modest price increase and see how your metrics are affected. If you have a solid marketing strategy, chances are you won’t see any significant change in your conversion rates.
Consider this: When you set your price based on a so-called “market average,” you’re basically saying you are average. If you don’t believe you are the best at what you do, why are you even doing it? If you do believe you are the best—and you should—shouldn’t your prices reflect that quality?
Believe you are worth the money, and your clients will, too—and your revenue will increase as a result.
Want insight about how to generate more growth and more money for your law firm? Schedule a private strategy session with our team today at 888-907-9958.