When the client winces… price and how to hug a haggler
A lawyer asked me for fast tips on dealing with clients who haggle.
The scenario is this: The client reviews your carefully proposed fee for legal services… pulls a face, sucks their teeth, and mutters about the competition…. and then no matter how low you think your fee is…they want a lower number.
Sometimes they even try and do this after you've finished the work... So, here’s what you don’t do:
Resort to violence
Fall into the price trading trap
Although if no-one is looking A might well be fun, for now, let’s focus on handling B. Falling for the trap means you lose. Always. Price trading traps usually look like this:
You: £6k? Client: £3k
You: £5k? Client: £4k
You: £4.5?
"Meet me in the middle?". Yuck. Awful, and yet horribly familiar, isn’t it?
Most law firms make a bit less than 20% net. This means giving all the profit away because you chose to negotiate as badly as a podgy pensioner in a Persian carpet shop. Here’s one way to handle the hagglers when they counter offer:
Decide if you want to work with them. At all. Not all clients are good clients.
Assuming you do still want them as a client, recap on the scope of what they need to make sure you are both clear. Don’t rush. Clients often don’t really know what they need, what’s involved or what risks they face (please avoid obvious scare tactics). It is your job to help them understand all this stuff. This is about helping not selling.
Reframe their expectations “I do quite a lot of this type of work, and, from experience, the final fees usually end up from £6k to £8k. As you know, the right fee means I can spend the right amount of time on the matter.”
Resolve the issue. You could change the pricing mechanism if you are feeling conciliatory (from estimate to fixed for example). But don’t let your first response be to cave in on the price point. Try this: “So based on what you’ve said, with one or two caveats, if we agreed to cap the budget at £6.5k - would that help?”
Commercial skills like pricing, profit preservation and cross-selling are not taught to baby lawyers at uni. Partners often think winning more clients is the answer to more profit – but there’s often an easier way.
Do you know a lawyer that struggles with hagglers or prevaricates on pricing? Or just want the reassurance that your practice is making the right sort of fees?