How to Get Clients Beyond “Sticker Shock?”

Christopher Marston at Inside the Firm of the Future has two recent thought-provoking posts on the practicalities of using value based billing in a law practice: Sticker Shock: Dealing with YOUR Psychological Barriers and the Clients’ and Sticker Shock or By the Clock: Myths About the Model Dispelled. Marston discusses the differences between fixed pricing and hourly billing, and why, ultimately, the fixed price lawyer gets better clients, more loyal clients, and more profits.

Many lawyers ask the same questions that commenters to Marston’s blog ask – how can lawyers that want to move away from an hourly billing system compete with lawyers on an hourly system who give clients ‘lowball’ estimates just to get the business? Marston explains that the clients who are hiring an attorney only on price are probably clients you don’t want AND reminds lawyers that communicating value is necessary overcome sticker shock.

As one commenter on Marston’s blog noted, the key is to get the client to recognize the sticker shock and come in for the services anyway. The same commenter notes that many potential legal clients have the option to do nothing – they don’t perceive the legal services as a necessity. If that’s the case, the value simply hasn’t been established. The lawyer’s job is to help the client realize how much the outcome of obtaining you as their lawyer means to them – show them that it is a necessity.

But one thing Marston doesn’t directly address in his posts is that most clients will experience some ‘sticker shock’ when they first learn of your fees. That’s only normal. If you remind clients of the importance of the matter – or the outcome –  to them and if you’ve been able to get them to articulate that value, the sticker shock should be only temporary. On the flip side, if you never experience any sticker shock or resistance to your fees, your prices are probably too low.

And one final note – although it does take time and effort to ferret out and communicate value to a client, it’s a business building, profit building and loyalty building activity – unlike many of the activities that are involved in hourly or post-engagement billing (such as creating and reviewing timesheets, reviewing and editing bills, chasing clients for payment, dealing with clients who don’t pay or who constantly argue about bills, etc.). Ultimately, the work that goes into learning about, establishing and creating value from and for your clients brings you more business and more fees.