It's Time. You're Going to Take the Plunge.

Obviously, higher fees and happy clients can be mutually exclusive. But there are tactics that can result in not only increased income, but also acceptance from clients.

Your fee-raising plan should be imposed on clients over three phases:

1. New clients

   The safest way to introduce an increase in fees is by testing the waters with new clients — those for whom you have not done work and don't have to worry about losing. To them, it's not an increased rate; it's just what the rate is, period.

2. New matters for noncritical existing clients

   If new clients readily accept the increased rate, move to the next phase by increasing rates on new matters that come in from existing clients who are not your practice's bread-and-butter. You're required to inform existing clients of any fee increases, and the appropriate way to do that is by amending your engagement agreement.

   By way of explanation, a short note is all that's required. Long justifications can imply uncertainty or even apology — when none is warranted.

3. All other matters and clients

   If you remain confident in your decision to raise your fee after the preliminary forays, roll out your new fee structure to all remaining clients.

   Always talk personally with major clients in advance of any formal notice of an increase. Confirm whether a fee increase fits within their budgets. Taking that kind of advance care highlights your sensitivity to their finances as well as your willingness to take their opinions into account.

   Of course, they still might say "no." In that case, consider a compromise. For example, offer to retain your fee at the current level for a specified period of time, after which they will need to accept the increase. In our world of credit and deferred payments, that will be enough to earn many people's approval.

   Pay more? No thanks. Pay more later? OK, fine.

   An acceptable way to frame increases is to say they are the result of increased costs, inflation and so forth. That reasoning works well when costs are in fact increasing throughout the economy generally. After all, the extent to which you make a profit depends on how your revenues exceed your costs. If costs have gone up, it's a justifiable time to raise your fees.

   During a recession, however, that assertion is hard to justify. When many businesses are closed and many people are out of work and experiencing psychological depression from economic turmoil, you'll have a more difficult time justifying a fee increase.

   The bottom line is that there is no perfect time to hike fees. Clients who don't want to pay a higher fee will seek other counsel, and you have to accept that. But those who truly believe your service to be of great value will accept the higher fees and remain with you.

   The important thing to remember is that your law practice is a business. You have expenses and you need to make sure that your inputs exceed your outputs. Fee increases are a natural part of the working world. As long as value is on your side, you will retain enough of your old clients and gain enough new ones to make your new fee structure profitable.