Law firm pricing is one of the most important aspects of running a legal practice, and is one of the most important factors to potential clients. So why don’t lawyers address this in their marketing?
Pricing not only affects how your clients view the value they receive from your services, but it also affects whether or not clients will hire your firm at all. And how clients perceive a price is just as important as the price itself.
So how much should lawyers charge? How do you know if your prices are too high, or too low? And what is the disconnect between lawyers and clients regarding how they each value pricing?
Customer Decision Making and the Importance of Price
People are willing to pay money for two things: to solve a problem (pain relief) and to feel good (pleasure). When people perceive that you can do these two things for them, they are consistently more attracted to you and your legal services. Now the question is: “How much will they pay for these two things?” That depends on how much value they perceive you bring.
A survey of how Americans make buying decisions shows that there are (on average) three groups of buyers:
- 15% of buyers always want to pay the lowest price.
- 5% of buyers always want to pay the highest price.
- 80% of buyers always want the best value.
Creating Value Creates Clients
Most people make their buying decisions based on value, which is the relationship between price and perceived quality. The business term for this price/ quality relationship is called the value proposition. Strategic lawyers and law firms know they need to figure out how they can add value to their business and its clients. Potential clients are going to make buying/ hiring decisions based on your firm’s value proposition. How much quality does your firm offer – in relation to your prices and fees – compared to other lawyers and law firms in your area?
Increase Law Firm Growth with a Strong Value Proposition
A strong value proposition can make all the difference in your sales conversations. It can have a significant impact on conversions, and as a result, revenue.
In its most basic form, a value proposition is a summary of how your legal services will benefit your clients. But beyond that, it presents the most compelling reasons why a prospective customer should become a paying client, and highlights the features that set your firm and law practice apart from others in the industry.
Pricing to Get Hired: Bridging the Gap Between Lawyers & Clients
A good value proposition communicates a few key points that are important from your client’s perspective. These key points could include:
- Appeal: Something your target clients want and/or are looking for
- Exclusivity: Something that sets your firm apart and not offered by other law firms
- Credibility/ Expertise
- Clarity: Your firm’s mission, visions and benefits are clearly communicated and easy to understand for potential clients
Some of the benefits you can expect when you create a clear, compelling value proposition for your law firm include:
- Potential clients can quickly and easily understand what your law firm has to offer
- Creates a strong differential between you and your competitors
- Attracts the right prospective clients and increases not only the quantity but the quality of prospective leads
- Improves client understanding and engagement
Conclusion
Pricing can have an overwhelming effect on law firm success and profitability. However, effective law firm pricing is not just about the price itself, but how clients perceive it. Being able to effectively communicate your law firm’s benefits and how these benefits bring value to your clients – and differentiate your firm from its competitors – can be the key to your law firm pricing strategy.