Studies show that 74% of price cuts are started by sales people, not customers. In legal services, that percentage may be much higher! Lawyers agree to discounts on their hourly rates, often without a hint of a prospect’s objection to the hourly rate. Here are some proven strategies for resisting discounts and increasing profits.9. Use the client’s success to your advantage. Most large, successful businesses have set price structures that are rarely altered. Study the pricing philosophy of the prospect and adopt the philosophy in your response. Often you’ll find that the company simply does not discount their prices on average volume orders. And in most cases, the projections of work for your firm will not be extraordinary large and, in this context, not warrant a discount.
10. Your firm negotiates dozens, if not hundreds, of Use fairness to existing client engagements every year. Furthermore, the firm’s top, longest-held client relationships typically have among the group a population of clients which do not receive a discount. It’s unreasonable to expect a law firm to extend discounts to all of its clients. Discounts to new clients put firms in compromised positions when they have to defend that discount to long standing clients. Your firm recognizes that the industry is too small and client relationships are too important to run this risk. Put the onus back on the prospect by asking them to explain how you can give them the discount and continue to earn the respect of your top clients. Here’s how to word it. “I assume your company values the integrity of its business partners the way we do. Does pricing services below the rate given to loyal clients constitute a level of integrity that would pass muster with your company?”
It goes without saying, if you would like to talk about training your lawyers in resisting pricing concessions, please give me a call. It costs nothing to talk.