Law Firm Strategy
By Patrick J. McKenna
In seeking new business, your last resort should be to discount fees. But if you are faced with a situation in which you absolutely have to bend, you must extract a reasonable quid pro quo in exchange for the discounted fee. This is because, as we all know, giving away a service will only cause your client to attach no worth to it—and it will also create a precedent for repeating the practice.
What can you extract in exchange? Here is a short list of quid pro quos that you might want to consider.
- I am constantly surprised at sophisticated lawyers’ willingness to offer discounts unconditionally. If you are going to offer a discount, which by definition affects your firm’s profitability, it should only be in exchange for a commitment from your client that the deal is yours as a result of the concession.
- You might request that the client pay your accounts on a monthly basis and render payment electronically within two business days of receiving the account. The effect of this quid pro quo is to enhance your cash flow and profitability.
- It may be somewhat easier to provide a fee concession if you can reduce some of the time you or your people might have to spend on the more mundane aspects of the transaction. If your client then would be willing to provide some human resources to supplement the effort, the effect would be to reduce your costs.
- There could be enormous compensatory value to your firm in having a client agree to serve as a spokesperson for the firm or as a reference with interested prospects.
Put your head together with the client and you might be able to arrive at other creative solutions that will enhance your return.