Sometimes giving discounts is inevitable. The following tips can help you reduce the impact of those discounts.
Attorneys want to start a new relationship on a positive
note and feel certain that they can manage the work profitably. Often attorneys
fear the client relationship will be discounted if a price concession is not
given. In those situations, discounts may be unavoidable. In these cases it is
best to minimize the impact of the discount. Here’s how.
13. Negotiate the lifetime value of the discount. Most
company relationships with outside counsel last for several years. The
discounts negotiated today form the basis for pricing discussions in future
years. Often, a discount in year one is compounded by a similar discount percentage
in year 2 and beyond. When a discount is inevitable, ask for a renewal of the
engagement in the second year without the discount. This cuts in half the
discount amount over the two year period.
14. Negotiate the rate increase instead of a rate discount. Law
firms routinely increase their hourly rates on an annual basis. Clients, aware
of this, often ask for both a discount and a rate freeze, significantly
increasing the value of the discount. Counter rate discount requests with a
choice of either a rate discount or a rate freeze.
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.
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