So many lawyers have written to me for coaching regarding the same problem about what went wrong in their sales calls with prospective clients that I just decided to convert my answers into an article for everyone’s benefit. The questions all resolve around what went wrong and how to best quote or estimate the price of legal services to prospective clients.

The conversation goes something like this:

Prospective client: “How much do you think this will cost?”

Lawyer: “It’s hard to tell. We’ll work hard to be as efficient as we can.”

P.C.: “That’s great, but how much do you think we’re looking at?”

Lawyer: “My rate is $250 and hour, but for you, I’ll cut that to $200.”

P.C.: “I appreciate that, but how much do you think we should be budgeting?”

Lawyer: (knowing that if every single thing goes right, and nothing goes wrong, the case can probably be handled for $15,000): “Well, you should figure between ten and fifteen thousand dollars.”

I generally prefer to focus on what went right, instead of the negatives. But in this case, it’s instructive to focus on what went wrong in the all-too-common example above

Many Lawyers Are Uncomfortable Charging For Their Services

In the first part of the exchange we see an example of a lawyer who may be uncomfortable charging for his or her services, perhaps out of a misguided (and common) misconception that lawyers should be "above" such pettiness as money.

It’s also possible however that the lawyer simply is oblivious to the budgetary process of the client who just needs a number to put into the budget for the upcoming period(s) and/or to conduct a cost/benefit analysis. Not to suggest that any client looks forward to paying for legal services, but I hope you’ll take comfort knowing I’ve found that most clients, especially business clients are more comfortable talking about the price of the services they buy, than are the lawyers.

Don’t Negotiate Against Yourself

In the second part of the exchange we see how 20% of many lawyers’ revenue disappears when they fail to listen to the question and negotiate against themselves. Note that the client didn’t ask for a lower rate, only what the price would be.

Too many lawyers substitute their own assumptions and hear what they are afraid a prospective client might ask, instead of what is actually being said. Be aware that, especially when it comes to “bet the ranch” type cases, most clients are not nearly as price-sensitive as many lawyer fear.

And for those who are, there are many safe and predictable ways to give them better value, while earning a premium fee for yourself over & above what you’d otherwise earn strictly by-the-hour.

“It Will Probably Cost Between. . .” Sows The Seeds Of Discontent

In the third part of the exchange the lawyer sets him or herself up for ultimate failure. No matter what price range a lawyer gives. No matter how many different disclaimers accompany the estimated price range. Every single time, with no exception in the history of the world, the client will always leave the meeting with hopes that they’ll end-up only having to pay “around ten thousand”, while the lawyer will leave with hopes that they can “bring it in under twenty.”

And if by some miracle everything does go right and the final bill ends up being $15,000, the lawyer will expect a hero’s welcome for saving the client $5,000, which the client will inevitably feel they paid 50% more than expected.

Simple Solutions

1. Clients come to you for results, not effort. Whenever possible base your fees on the value of your services to the client.

2. If you can’t figure-out how much a case is likely to cost on-the-spot, don’t be the least bit embarrassed to ask for time to analyze the facts and get back to the client the next day with a real number that builds-in a margin of error.

3. It’s also a good idea to estimate the price in terms of controllable steps and then keep the client informed as to which step you’re on and how close-to-budget the case is actually progressing.

QUOTE OF THE WEEK

“You either make money or make excuses. “
-Ryan Hunter

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