When Clients Don’t Perceive Value They Default to Price


Would you hire yourself to solve a legal matter and would you happily agree to pay your fee?

This is the question you need to ask yourself and respond to with an honest answer.

Many lawyers don’t understand why they are perceived as better (or worse) than the next lawyer, what their true value is to the client and why they are (or are not) worth their fee. And if they don’t know, how are potential clients to know?  And when clients don’t know why a lawyer is worth their fee, they will shop on price.  Period.

If you don’t know your value as an attorney you may very well be attracted to this recent billable hour calculator presented by Lawyerist which purports to help (new) lawyers calculate their hourly rate based upon their general overhead and annual needs in order to survive.  Certainly, understanding how much money you need to bring in in order to keep your doors open is an imperative. But I would argue that there is so much more to the calculation then just figuring out the cost of your rent, malpractice insurance, student loans, etc., and then passing this along to your clients in the form of an hourly rate.  This is not a client-centric approach.  It does not consider the value you are imparting to the client.  It is saying, ‘This is what I need to earn.  If you can pay me what I need to earn, then I will represent you.’ (Of course, Sam Glover is not truly saying this but if the only blog post you read this year on calculating fees is the one referenced, you could be misled into making unfortunate business choices.)

I’d like to give you a perfect non-legal example of how a client goes through this decision-making process.

This summer I decided I would get my son a math tutor to give him a leg up for his next year of schooling. I asked around, searched online and got a rough idea of what the hourly rate should be.  It was fairly consistent – $60 per hour.  I talked with different organizations, several individuals, and the fee appeared universal.  However, no one really captured my attention.  So, I contacted my son’s math teacher, told her what I wanted to do and she said, “I tutor students over the summer.”  I said, “Great.  You already know my son so it should be easier.  How much do you charge?”  She said, “$80 per hour.”  This was thirty three percent more than I expected.  Multiplied by several sessions and it was substantially higher than I was prepared to pay.  I told her it was considerably more than the majority of tutors I spoke with.  She very nicely and quickly said, “Quite possibly it is. However, I’m trained in Singapore Math.  I know what the curriculum will be next year. I already know your son and his work style and I will drive to meet you half way.  I also understand you want multiple sessions.  Because I already know your son, I don’t believe he needs multiple sessions over the summer. He may just need two sessions closer to the start of school.  Not having multiple sessions will save you a considerable sum.  Your goal is to have him confident and ready for the fall.  I’m confident we can do this in two sessions.”

In a handful of sentences she addressed my concerns, showcased her uniqueness and imparted value which took the discussion away from just the hourly rate and refocused it on the end result – a student confident in his math skills at the beginning of the school year.  This was and remains my ultimate goal.

Every time you meet a client, if you don’t impart value unique to your representation and stay focused on the desired end result for the client, they will default to price.  Yes, price is very much a consideration but it is up to you if it is the main consideration. According to Jay Foonberg  and numerous studies, price is not the main consideration for the majority of clients.  Your goal is to have price be further down the food chain in the decision-making process.

If you now use the billable hour calculator to determine roughly what you should be charging to make ends meet and then factor in why you are uniquely valuable to the client, you will have an hourly rate or flat fee that properly reflects both.  You will also be more confident and more secure when presenting these fees and for most lawyers, this is half the battle.

How have you showcased your value to clients?

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6 comments on “When Clients Don’t Perceive Value They Default to Price

  • A big way for attorneys to showcase value to their clients is to emphasize the emphasis one will put on attorney-client communication. Ensure that the client’s phone calls and emails will be returned within 24 hours. Also ensure that one will send the client regular updates about the status of their case and that the lawyer will be available to answer questions. One of the biggest concerns that people have, regarding their lawyer, is whether they will be reachable. By addressing this on one’s website and in the initial consultation, the attorney can set themselves apart from their competition. Clients, in turn, will often be willing to pay a little more for an attorney who provides this level of service.

    One of the big things I would say attorneys should take away from your article Susan is the need for a client centric approach, which you mention. Lawyers who decide to provide value, as the client defines value and not how the attorney defines value, will be the ones to do well in the future.

    • Luke, your comment is spot on. Creating a warm, caring customer experience by being accessible will definitely create more loyalty and referrals from clients. We all want to be special, especially when feeling vulnerable about needing legal services.

      For those who may say there’s no time to devoted to designing a nurture sequence, you may want to reconsider. The value of what I call ‘lifetime clients’, in terms of billables and warm leads, far outweigh the cost of hiring a consultant to outline and implement your onboarding plan.

      How can you demonstrate your value right from the start? Clients come to us for legal services but don’t know the process, which makes them feel ‘one down’ and anxious. Turning that around is job one.

      Change the way you share your service agreement. Instead of just sharing your fees spell out about the mutual commitments you’re making with clients around intention, communication and concerns. Walk them through the value-big and small- they can expect to receive from you. Simply explaining the timeline can be a huge benefit for clients.

      Recently I’ve had the chance to purchase legal services. If I was grading, most of the firms would’ve gotten a D. It was a negative experience I think many new clients share. The firm that won my work made me feel like they were interested in me, not simply the amount in controversy. Wonderful conversation, thanks Susan.

  • I try and quote flat fees whenever possible. Also- I openly tell clients when they question my fee that my goal is not to be the cheapest, but to provide the best value. That being said many people default to the cheapest quote and then regret it later. That is why is so critical to go above and beyond expectations to generate quality referrals which are always superior to cold calls.

    • Jason, how do you showcase value during the interview process? What are you sharing during the client’s decision-making phase that imparts a value worth paying the higher fee? I only question this because it is easy to say, ‘I’m worth it’ but fail to give concrete examples, possibly issues the client did not consider before.

  • Personally when I quote a flat fee I describe the value to the client a few ways. One, I don’t do more work on the case than what was originally agreed upon before I talk to them. This ensures that I keep them in the communication chain at the various stages. I also let them know that I am available by e-mail for answering questions and typically fairly quickly. Most of the little things can be addressed by e-mail such as the client’s concerns that you forgot to update them. So I tell them right away that they should feel free to reach out by e-mail or call me if they are unsure about the status. Most clients are happy with the response by e-mail that I provide. (This has the added benefit of making it easy to keep in touch with clients while overseas. Most clients are used to e-mailing, which is much more reliable when connection speeds are not the best.)

    I also give them a direct phone number so that when they call that number they don’t get the run around from a secretary. Then finally, once I set a fixed fee, that includes the recognition that I don’t charge clients extra for spending time on the phone or e-mailing them to answer those questions that come up. Once they are a client I make myself available to them in all of those ways until the representation is complete. So they don’t get additional bills later suggesting that keeping in touch is somehow not what they should be doing.

  • Another angle of analyzing how you present (sell) your legal services – based on value or price is to review how you purchases services for your own firm.

    Generally we tend to present/sell in very similar manner the way we purchase, a key point in learning from our own style. Once we know where our natural tendencies are, we can work towards making improvements.

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