In this week’s edition of Things I Wish I Knew, Joleena Louis discusses how she handled the delicate process of raising billable rate in a solo practice.
One of my goals for this year was to increase my income by 50%.
That sounds like a colossal feat, but it is definitely doable, and one way I plan to achieve that goal is to raise my hourly billable rate and initial retainer requirement.
Since starting my solo practice, I have reached the point where I don’t need to take every case that comes to me. I have grown as an attorney since I started my practice and the quality of my services has increased. I’ve also added value to my services and feel that my rates need to match the value of my work.
Anticipating problems before they arise.
One of my initial concerns was scaring away clients with my higher rates. Potential clients who may have heard of my old rates might be turned off by my new fees.
Referrals can come from a variety of places, especially from your own clients. Having your fees discussed by others is out of your control and what is being discussed may not be accurate information. A client may refer someone and the charge for a consultation may be completely different that what was discussed.
Also, current clients who have retained me for one legal issue who enter into a new retainer agreement for a different issue may find it peculiar to be paying a higher fee.
With new clients who may not know my old rates, I state my fees without explanation. If asked why my rates are so high, I explain the value and quality of services I offer and under no circumstances will I lower my rate or offer a discount.
Incidentally, every time I’ve given a discount I’ve regretted it. The clients who pay my full retainer are usually more cooperative, don’t waste time, and generally complain less.
Keeping it consistent with current clients.
I decided to not increase my hourly fees for current clients, even though my retainer agreement states that I can, with notice.
To me, it feels unfair to raise my rates at this point. Most of my client matters will come to a natural end, so eventually all my client will be on the current rate. Plus, I would hate to lose their business.
People don’t like inconsistency and changing rates mid-case would reflect poorly on me.
In the end, I think my rate increase will be beneficial for my practice. People are willing to pay more for quality and being confident in the value of my services shows the client that what they are paying is worth it.
Not only will I have an increase in profits, I’ll also be able to attract and keep my ideal client while weeding out the others.