Law Firm Marketing and The Prestige Pricing Strategy™
The strategy I am going to outline for you in this article is not for wimps. If you are not the kind of person who can stare adversity in the face and laugh, then you should stop reading immediately.
Today I am going to share something with you that less than two percent of all lawyers have the guts to implement. I call it The Prestige Pricing Strategy™. This is a strategy that can help you grow your revenue without increasing your workload.
There are two steps to implementing The Prestige Pricing Strategy™.
Step One: Build a Solid Value Proposition
Your clients cannot think of working with you as hiring a lawyer. They must view working with you as a good investment. This means: If you are a transactional lawyer, you make the transaction more valuable. If you are a criminal lawyer, you give the client their best opportunity to fulfill their earning potential by remaining free. If you are a divorce lawyer you give the client the best opportunity to keep his dignity and the assets he really wants.
In The Prestige Pricing Strategy™ you never, ever, quote your fee before you make certain the client understands the value they are receiving. Contrary to the belief of most lawyers, it is YOUR responsibility to make sure the client understands the value. Do not expect them to walk through the door, give you a hug and say “Boy am I glad I found you.” You have to HELP THEM feel that way by presenting the value your legal service will bring to their life.
Step Two: Charge Premium Prices
This is the easy part. If you have done a great job explaining the value of the service you provide, you can charge a significantly higher fee than anyone else in the market. You read that correctly. If you show the client your value, you owe it to yourself to be the highest priced lawyer in town.
Look at it this way: You can be Walmart or you can be Bergdorf Goodman. You can be Motel 6 or you can be The Ritz Carlton. You can be Jet Blue or you can be NetJets. Not everyone can afford the latter choice in these examples but, not everyone is their ideal client either.
Benefits of The Prestige Pricing Strategy™
Attracts the Best Clients
If you are seeing a great deal of crappy clients come through your doors, chances are good you are not charging enough money. Many lawyers believe that clients who pay high prices are more demanding. Nothing could be farther from the truth. The worst clients on the planet are the cheapskates who squeeze you for every nickel and dime. Let those folks work with another lawyer.
This is a mistake I made early on in my career. I never turned away anyone. I thought any business was good business. Boy was I wrong. This is the main reason I am making a HUGE change to my business in 2011. I will only be accepting 12 new one-on-one coaching clients. This forces me to be selective and quote a fair value-based fee with NO NEGOTIATION. This self imposed limit has already changed my own perception of my value. There are some clients who will not be able to work with me. I cannot be everything to everyone.
Allows You to Focus Your Business Development Time
This strategy is not about working less. This is about spending more time on marketing. Think about it: If you raise your fees and you work with fewer clients you will have more time available to concentrate on attracting the RIGHT TYPE of client. This time invested in marketing will help you keep the pipeline of prospective clients full at all times. It may even allow you to hire an associate to take on the overflow work.
In my firm I set up a waiting list for my Strategic Advisory Groups. Earlier this year an Immigration Attorney dropped out of one of my Miami groups. I replaced him with one phone call to someone from the waiting list. That waiting list is stocked with people who come from my marketing.
The Fee Commands Respect
Do you ever have trouble getting clients to do what you want them to do? Charging a fee that grabs the client’s attention will increase their compliance with your requests. In fact, a study conducted by Stanford University shows a strong correlation between price paid and happiness with the experience. The higher the price, the better the experience for the client. Why? Because compliance increases and compliance leads to better results.
My personal experience with this phenomenon has proven it to be accurate. In the past I have made barter arrangements with attorneys, exchanging my services for theirs. This has almost always resulted in the attorney devaluing my service and taking it for granted.
Drives a Wedge Between You and Your Competition
You want to be perceived as a better lawyer than your competitors. Yet you charge the same price as they charge (or less). What does that say about you? Are you worse or just foolish?
There are a few other people in the United States who do what I do. None of them is Ivy League Educated with two master’s degrees and 20 years of practical experience in business strategy. I have earned the right to charge high fees and I’m sure you have too.
Help your clients understand why you provide a better value and then charge accordingly.
Pride in Spending Effect
People want to work with the best. When they decide to hire the best lawyer, they want everyone to know about it. If you want more referrals, charging a high fee will help you achieve that goal.
Two Caveats:
One: You must provide an outstanding value. If you do not provide great service, a terrific experience and make an emotional connection with your clients. If you do not, you have not earned the right to charge high fees. Fix your service, your experience and your relationships first. Then raise your fees.
Two: This is very difficult to do with hourly billing. Hourly billing is the longest running scam in the world (perpetrated by many professions but is especially nefarious when used by a lawyer). Since hourly billing creates an inherent conflict with the client, the Prestige Pricing Strategy will not work. If you are a lawyer who is not creative enough to come up with a billing model that works in the client’s interest, you will never be able to command a high fee premium and my clients will routinely kick your ass when it comes to revenue.
So there you have it. The Prestige Pricing Strategy™ has helped more of my clients make more money and live better than anything they learned in law school.
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