Increasing Fee Pressures
At one time or another, every Attorney, CPA, or business professional has received push-back from a client who is less than happy with the amount of fees charged for services. Professional service providers gain expertise as a result of years of training, experience, and ongoing education, all of which translates to passing on tremendous value for clients. Sometimes, however, communicating the value of services to a client can be a challenge. There is a saying, “If you think a good lawyer is expensive, wait until you see how much a bad one can cost you!”
Fee pressures have become increasingly intense, particularly as a growing portion of consumers have decided to utilize online companies that provide an array of commoditized, lower-cost professional services. However, clients that use these online services don’t know what they don’t know, and sometimes a conversation with a legal professional can uncover an issue that, left unchecked, could develop into a significant legal or financial problem. For example, during an in-person consultation, a client might casually mention a business practice that could expose him to huge legal or financial liability; or a client could refer to her new business location in a different state, where she has not properly registered or started paying the required taxes. Getting clients to come in for a consultation can often persuade them that the services of a professional are necessary. But many clients still insist on keeping their costs as low as possible.
Communication Is Key
What is a professional to do?
The most important thing you can do, of course, is to communicate in an upfront and transparent manner about your fee structure and the anticipated costs to your client. Whether you bill by the job or by the hour, utilize retainers, monthly fees, or some other billing method. Clients should have a clear idea of what to expect when they receive your bill. In addition, describe the value they will receive from paying your fees, such as personalized and attentive service.
There are steps you can take to keep your clients’ costs reasonable while still providing quality services. This can be accomplished, in part, by keeping your own expenses down.
Reducing Operating Expenses
Some firms have lowered their own overhead by decreasing their physical footprint in high-cost metropolitan areas, or leaving these areas altogether for nearby, less expensive, locations. Firms can also use space more efficiently. According to one source, 26% of attorneys have office space exceeding 1,000 square feet per attorney (that’s larger than many apartments!). Reducing administrative costs by re-evaluating staff needs and/or outsourcing tasks when practical and automating procedures such as time-tracking and invoicing may provide additional savings. Some other cost-cutting measures could include renegotiating lease terms and shopping around for savings on travel, insurance, technology, and even office supplies.
Clear and transparent communication with your clients about fees and taking measures to regularly examine how your operating costs can be reduced may still not make your client happy to receive your bill, but it should provide a greater opportunity to meet a client’s expectations.