As workload increases, so should fees

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Published on 6/23/08

All the scare stories about recession in the daily news should not divert our attention from the fact that there is still more than enough work for good lawyers to do.

In fact, sole practitioners who have effectively marketed themselves can face the prospect of having client demands that are so great that they cause stress over whether the work will get done.

These days a single lawyer can create an outsized presence in the community through a website, lawyer blog and advertising, as well as by using traditional tools of published columns, speaking engagements, service on community boards of directors and bar association activities. If these have all been successful in bringing in a volume of work that is too great to handle, does it make sense to drop them?

Concern over having enough in the pipeline for future business is certainly legitimate, but being overextended is just as great a worry. The flexibility offered by word processing and billing software, voice-mail, e-mail and other electronic tools — combined with the entrepreneur's "I can manage 100 cases by myself" mentality — can lead to a volume of work in which clients increasingly experience quality problems and inattentive service. That defines an overwhelmed practice that is either headed into the hands of the state bar disciplinary system (where 60 percent of complaints involve practice management and quality issues) or into insolvency.

The missing strategic ingredient in a practice with too much work is making more profit from the business you already have. If you are truly "full," then you should "fire" some clients. But, let them self-select. And you can do this by raising your fees.

This is the marketing tactic of scarcity, which is too seldom used. Some clients will not want to pay the higher fee and will leave. Other prospects may see the higher fee as meaning that your practice is unique and will seek you out; you can choose their business as you wish. Raising prices, on balance, will manage workload without sacrificing financial viability.

On a listserv in which I participate, a lawyer recently requested comments about his proposed letter to his major clients. He wanted to "shout from the highest roof" that he will NOT raise his rates.

I responded that larger business clients do not buy legal services based solely or even primarily on hourly rates. They, like most others, buy based on perceived value, expectations that you can provide solutions to their challenges and personal rapport. Sending a letter as this lawyer framed it puts the focus on price, not service. If you provide the service and value that clients want, you can justify charging a higher price.

There is no perfect time to raise fees. Those clients who do not want to pay the higher fee will seek other counsel. Those who believe your service is valuable to them will accept the higher fees and remain with you. It's a simple equation — provided that value is on your side.

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