Raising rates is a standard business practice, often indicative of increased value and expertise. However, managing a client relationship in a way that makes a rate increase not only acceptable but also welcome is a nuanced skill. It’s rooted in consistent value delivery and open communication. In this article, we’ll delve into the strategies and best practices that can make this delicate transition smoother for both lawyers and their clients.
Setting the Foundation: Building a Strong Client Relationship
Deliver Extraordinary Service from Day One
The foundation of any successful client relationship is exceptional service. From your first interaction, strive to exceed expectations in terms of legal expertise, responsiveness, and outcomes. This sets the stage for any future discussions about rate adjustments.
Regularly Communicate Value
Your monthly invoice is more than just a bill; it’s an opportunity to communicate value. Use it to summarize the work that you’ve done, the time that you’ve saved the client, and the positive outcomes that you’ve achieved. This keeps the client aware of the value that you provide.
Build a Personal Relationship
A strong client relationship goes beyond professional interactions. Take the time to understand not just your client’s business but also their personal challenges and goals. This deeper connection fosters loyalty and can make conversations about rate increases more comfortable.
Transparency is crucial in any client relationship. Keep your clients informed about any changes in their cases, matters, or billing. Even when there’s no significant update, a quick check-in can go a long way toward showing that you’re actively thinking about their needs.
Offer Value-Added Services
In today’s competitive landscape, going beyond billable legal work is essential. Consider offering value-added services such as educational webinars, professional introductions, newsletters, or even 24/7 availability for emergencies. These services not only enhance your value proposition but also provide tangible justifications for a rate increase.
Solicit and Act on Feedback
Feedback is invaluable for continuous improvement. Regularly solicit it through check-in meetings and anonymous surveys. More importantly, act on this feedback to refine your services, thereby enhancing your value proposition.
The Mechanics of Raising Your Rates
Assess the Value Delivered to the Client
Before initiating a rate increase, take stock of the additional value that you’ve been providing. This could be enhanced legal expertise in a specialized area, faster response times due to additional staff, or investments in technology that lead to more efficient and faster service.
Be Mindful of Timing
The timing of your rate increase can significantly impact its reception. Ideal times include after a successful case resolution, during a scheduled client review where you can demonstrate added value, or when introducing new services or technologies. The end or beginning of a fiscal year also offers a natural transition point.
Craft a Value-Backed Pitch
Your pitch should be a compelling narrative that centers around the value you bring to the table. It should review the value that you’ve consistently delivered, justify the rate increase by explaining new value-added services or expertise, and discuss how these enhancements will benefit the client. Write down your pitch and practice it to ensure clarity and confidence.
Choose the Right Communication Channel
The avenue you choose for this delicate conversation should facilitate a two-way dialogue. Options include an in-person meeting, a videoconference, or a formal letter or email followed by a meeting.
Conduct the Meeting
The discussion should be structured yet open. Execute the meeting with poise and professionalism. Listen actively, and be prepared to address any questions or concerns that your clients may have.
After the meeting, send a summary email or letter outlining what was discussed and agreed upon. Implement the new rates and added services as discussed and continue to monitor and communicate the value being provided.
In our many years of experience working with attorneys on business development and client relations, the prevalent concern around raising rates has been the fear of losing clients. However, it’s worth noting that we’ve only seen a client sever ties for this reason once. This underscores that with the right approach, most clients understand and accept the necessity of rate adjustments. A rate increase, when presented as a reflection of enhanced value, can actually strengthen your client relationships. The key is to focus on what’s in it for the client. By following these best practices, you’re not just asking for more—you’re offering more. Good luck!