• Tweet

There are times to raise legal fees, decrease legal fees or leave legal fees alone while revamping how services are delivered.  The U.S. Post Office is an example of what NOT to do.

Nearly two months ago, this article on the financial crisis facing the U.S. Postal Service caught my eye (and do the read the comments):

The U.S. Postal Service wants to raise the price of a first-class stamp by 2 cents to 46 cents to avoid running out of cash next year, officials said.

A sharp decline in mail volume, the recession and increased use of the Internet to pay bills have contributed to a financial crisis.

On Tuesday, postal officials proposed mitigating the problem with an average 5.6% increase on a range of services that include first-class mail, advertising mail, periodicals and packages. The increase, about 13 cents a month for the average household, would go into effect Jan. 2.

“It really comes down to potential financial insolvency,” said Stephen Kearney, the agency’s senior vice president of customer relations. “We’ve never seen anything like this.”

Raising prices on first class postage is not the answer to a bad business plan.  This is an example of a business assuming the market would never change and they had the market cornered.  This is an example of a business not reading the tea leaves and now in a desperate attempt to salvage their business they are raising prices when it is the absolute worst thing to do and will only hasten their decline, in my opinion.

The key is this statement:

A sharp decline in mail volume, the recession and increased use of the Internet to pay bills have contributed to a financial crisis.

How is raising the price of first class mail going to help them address these problems?  It is only going to further decrease the volume of mail they handle and encourage those still on the fence to pay their bills via the Internet.

I remember when e-mail was first introduced and took hold cutting into the U.S. Post Office’s profits.  They suggested they were entitled to revenue from each e-mail sent, approximately $.05 – $.10.  This was quickly nixed because how could they lay claim to revenues from internet use?

What the post office has not done is look to see what the demand for their first class mail services is, where their true value lies, and what they have that no other organization has.  What value do they still have for us, the consumer.  They simply seek to address their revenue needs by raising costs of delivery, something most people are relying upon less and less.

Now on to lawyers.  This is a shining example of what not to do simply because you don’t know how to restructure your business, take advantage of technologies designed to cut your costs,  or are carrying significant overhead and must feed the overhead monster before you can feed yourself.  Note: this is very different then raising your fees because your services were undervalued in the first place or doing so because you provide a unique service which is in demand.

I recommend you review your business plan every six months to see if you are on target for your goals.  What? You don’t have one?  Oh, yes, there are many people out there suggesting you fly by the seat of your passion and ‘just do it.’  Well, that’s great for getting off the launch pad – jump in and work out the details as you go along.   But winging it is not great for continued success. You DO have to reassess every aspect of your business – factors within your control such as  goals, costs, ideal clients, marketing, overhead as well as those factors you must respond to such as the economy and technology and practice area changes.

So, will you be the U.S. Post Office in 2011?

Did you start out with a business plan or developed a business plan along the way?

About the Author

Susan Cartier Liebel is the Founder & CEO of Solo Practice University®, the #1 web-based educational and professional networking community for solo lawyers and law students. It is her personal mission, through education and authorship, to change the way law schools educate their students and the way the legal community receives solos.
Website | Twitter | Facebook | LinkedIn | Google+

View all posts by Susan Cartier Liebel →

Solo Practice University® is now partnering with progressive law schools that realize a significant percentage of their students will practice as independent professionals and have made the commitment to help them achieve their goals.
Learn more about Bridges →