Prove Your Worth By Providing Value, Not Just Service

Why should a client pay what you ask? There are oodles of lawyers out there — many who undoubtedly charge less than you do — so it is important for you to prove your worth. The way to do that is through your billing statement.

Almost any case or project can be broken into tasks, and each task can be priced separately and differently to create multiple pricing schemes within a single transaction that can be tailored based on client preferences and value perceptions.

Creating an eye-friendly matrix illustrating the different tasks necessary for a particular case and the pricing options available makes clear where costs can be controlled and where they are inherent. It educates clients about what can be done to lower the overall price of a project.

Such value-added elements allow you to generate billing statements that are easy to understand, that clearly list actions taken on the client's behalf, and that relate those actions to the time they took and the value they provided. Such financial illustrations will be more meaningful to the client than simple hourly billing statements, as they go beyond a mere laundry list of tasks performed.

However, even if lawyers are providing and documenting value, price pressures can lead clients, particularly corporate ones, to seek lower billing rates. The advantage of charging for value, however, is that rather than lowering the price, lawyers are in a position to take services off the table in order to cut the overall cost to the client.

In effect, when the client wants a reduced price, you are unbundling the services to accomplish that objective. You are charging a different price for a different group of tasks and functions.

In other words, for X dollars, you as a lawyer will do this, and for Y dollars you will do that, minus ABC. While ABC may not be of vital importance, the client gets the message that you're adjusting the fee based on the level of service to be delivered.

For example, consider the components of an hourly fee. If returning phone calls within two hours is part of your regular hourly rate, take that response time off the table if you cut your hourly rate in response to a client's request. Tell the client that your response time will be 24 or even 48 hours.

The point will be clear: You are not lowering your price; you are changing the value composition of what the client is buying.

Proving your worth by demonstrating value through billing is also helpful when it comes time to increase your fees. Although lawyers are understandably uncomfortable about raising rates, you can soften the blow of a fee increase by adding value to your service. In other words, do more things that cost less than the increase.

If you handle estate planning, for example, you could add financial planning as a service, either as part of the fee package or for a designated added cost. Sometimes, showing that you provide better-than-excellent service is all you need to justify a fee increase. For instance, consider packaging final documents in an attractive folder and hand-delivering them to the client.

This improved presentation adds only pennies to your costs, but will be perceived as an example of your caring for and nurturing of the client. A faster turnaround from engagement to completion is another way of adding value and exceeding expectations.