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They don’t know what they don’t know. Maybe they just need to learn how lawyers charge for their services—and why.
Is there ever just a single way to do something? It may seem that way if it’s the way things have been done since anybody can remember, but seldom are you required to keep on doing it in the same fashion.
This is particularly true if you discover that it’s just not in the best interest of your customers. As long as anybody can remember, law firms have billed clients using the format of the billable hour. There was no a la carte ordering possible. It was like going to a fast food franchise. Sorry, no substitutions allowed. You can have whatever you want, as long as it’s up on the menu board. That works fine for a burger and fry combo with a large soda, but not so well for the often-unpredictable nature of legal proceedings.
Is it a cost, or an investment?
We live in the age of the empowered consumer. While they don’t necessarily expect to tell you how to run your business, today’s clients will press you for an explanation on why your fees are structured the way they are. Take the concept of the billable hour.
How is it possible for them to understand and appreciate the cost of services if they’re focused on the amount of time you’re putting in for them rather than the value you’re creating? What’s more, the rest of the world has become far more transparent, offering customer-centric pricing.
Is it less expensive pricing? Are businesses sacrificing income in order to acquire and retain customers? The answer is a resounding no. All these businesses have done is to set and manage their customers’ expectations.
And that’s important for a law firm. Unless you’re someone who has a constant or ongoing need for legal services, an understanding of how lawyers charge for their services—and why—is a totally foreign concept.
All a new client might truly know is that they should have the right to easily calculate how much this is going to cost them.
The default mode
Like any professional, we have a tendency to immediately launch into doing what we are trained to provide for clients when they seek us out for our services. In doing so, we often skip a crucial aspect that sets the stage of what a client should expect from us.
Do they know?
Are they fully aware of what you will provide for their investment in your firm’s services? You know your full range and capacity. They, however, do not. And often, the only certainty they have is the established billable hour price they will contract to pay.
This sets up a lopsided dynamic. Both you and your client need an atmosphere of complete transparency—but what you may have instead is an unspoken distrust. They might show a tendency to be unwilling to interact with you because as far as they know, every minute is going toward that (not fully understood) billable hour.
There’s a simple solution, and it can go a long way toward establishing your firm’s value proposition. Manage their expectations. Set their mind at ease by taking a zero-based assumption approach. It’s human nature to question and dispute what we don’t know. Often, though, it’s simply because no one took the time to explain it to us.
Your clients may not necessarily be looking for ways to dictate how your firm charges them for services. They could simply be searching for clarification and understanding.