Carolyn Elefant, in MyShingle, suggests that a new lawyer should compete on price. Perhaps to be more fair, she asks “why not?”
She suggests that charging 30% less than the large law firm lawyers is appropriate and will bring you much success.
There are reasons for not lowering your fee:
1. You don’t have to in order to get business. Most lawyers get their business by referral, not because they’re less expensive.
2. A lower fee generally is associated with a lower quality of work. Seldom does the client make the conscious connection between a small firm, lower overhead and lower fee.
3. The fee is not relevant. The total cost of legal services is the relevant factor, not the per hour fee. If you can get the job done more quickly with less review by others in the firm (double dipping) and with equal or better quality, the client will be super-charged with glee. And you haven’t lowered your fee.
4. Although you may be solo, your overhead may not be lower … and therefore you should not lower your fee until you have a firm understanding of the cost of running your law practice.
5. Your client is looking more for creativity than a lower per hour fee. One example of this is the law firm that said to a client, “Let us prepare and file a motion for summary judgment.” When the client say “No,” the law firm created a fee structure (1/2 of the hourly rate to prepare the motion and 2x the hourly rate if the law firm won the motion) that was creative and attractive to the client. The client said, later, that that was the best check he ever wrote — the law firm was correct and won the motion … the client was eliminated from the lawsuit without further expense.
Money is seldom the issue with clients, according to all the surveys and focus group studies I’ve seen. Thus, there is no reason to lower the fees. Focus on what is really important to the client … Ask the client what that is in each case … They want rapid response to their inquiries; they want lawyers with whom they have great rapport and who understand the client’s business and personal needs. They want lawyers who understand what they want in the lawsuit … !!!!!