Raising fees right

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Ed Poll
Daily Record Newswire

It’s time.

You’re going to take the plunge.

You’ve decided to raise your fees.

Higher fees and happy clients can be mutually exclusive. But there are tactics that can not only increase income, but also acceptance. Your fee-raising plan should be imposed over three phases:

1. New clients

The safest way to introduce an increase is to test the waters with new clients for whom you have not done work and don’t have to worry about losing them. To them, it’s just what the rate is.

2. New matters for noncritical existing clients

If new clients accept the increased rate,  increase rates on new matters from existing clients who are not your bread-and-butter. You’re required to inform existing clients of fee increases, and the appropriate way is by amending your engagement agreement. A short note is all that’s required.

3. Other matters/clients

Roll out your new fee structure to all remaining clients. Always talk personally with major clients in advance of a formal notice. Confirm whether a fee increase fits in their budgets. This highlights your sensitivity to their finances and willingness to take their opinions into account.

If they say “no,” consider a compromise. For example, offer to retain your fee at the current level for a specified period of time, after which they will need to accept the increase. That will be enough to earn many people’s approval.

An acceptable way to frame increases is to say they are the result of increased costs, inflation and so forth. That reasoning works well when costs are increasing throughout the economy.  During a recession that assertion is hard to justify.

Those who truly believe your service to be of great value will accept the higher fees.

Your law practice is a business. As long as value is on your side, you will retain enough of your old clients and gain enough new ones to make your new fee structure profitable.

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The principal of LawBiz Management, Poll can be contacted at edpoll@lawbiz.com.
 

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