A recent article on Alternative Fee Arrangements proposes a new way of thinking about billing: You need to price your services according to how much you can increase your client’s profits, not yours. The general concept is called Value Pricing: http://goo.gl/HpYPX
Since I think this article (in the link above) is useful to far more than just those considering alternative billing, I’ve summarized the key points:
- You need to present your clients with a unique value proposition. If others aren’t offering the value you can offer, then you won’t be getting into a price war.
- Find out what your client values most. By directing your services towards what they value, and towards their strategic goals, you maximize the benefit the client derives from your time. Through this client value focussed approach, you can become a long term strategic partner.
- Think about your client’s profits first. Satisfied clients will then increase your profits.
- Clients may actually pay a premium to have certainty in the price of legal services. They might also be willing to pay a larger retainer when the final fee has been set. And once again, when determining the total cost of legal services, be sure to consider the client’s perception of value.