Reducing client sensitivity to fees - Giles Watson
Price, pricing, fees, costs, sensitivity, positioning
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Reducing client sensitivity to fees

Are you under pricing pressure?

Are you doing all you can to reduce client sensitivity to your fees?

Over the last 18 months or so, I’ve asked the same question at the Queensland Law Society’s Practice Management Course, concerning the importance of price:

Think of the last time you selected a service provider (lawyer, accountant, financial advisor, plumber, builder, mechanic). What was the single main factor driving your choice of provider?

The answers have been surprisingly consistent, with results roughly as follows:

  • Price:         10%
  • Experience/expertise:        35%
  • Trust:      40%
  • Service:      10%
  • Other:     5%


On the back of these polls, we had some great discussions on when price is and isn’t important to clients buying legal services – and what law practices can do to reduce client sensitivity to fees. Certainly trust is important, and building trust can significantly reduce the focus on price in some circumstances. Below is a summary of the some of the issues raised around client price sensitivity.


Differentiate / Fight any perception that you are providing a commodity offering

If clients think you are only offering the same as everyone else, they will often look to get it cheaper. If you give them no clear reason to choose you, it will come down to price by default. The more unique your offering, the more people will hunt you out and be willing to pay a premium for your services. Develop a clear value proposition as to why someone should chose your services over a competitors.

Educate your clients on matter outcome risks

The more variable the result, the more important your expertise is, and the more important that clients can trust you. As with perceptions of commoditisation, if clients don’t understand the risks of a poor conveyance / will / commercial transaction, you can’t blame then for looking for a cheaper option (where’s the risk?). If, however, you educate them on the risks of a poor job – and of course what you are doing and how you are doing it – they will recognise the value of your offering and be more willing to pay the fees.

Build Trust 1: Build your expert status

Professionals focus on experience and expertise a lot as a differentiator, but from a client’s perspective, expertise is really just a subset of ‘trust’: expertise is reassuring and suggests people can trust you. Solicitors can therefore build their perceived trustworthiness by building their expert status: become an accredited specialist, get higher level qualifications, give presentations, write articles, join committees.

Build trust 2: create trust online

Build intellectual trust by writing articles and web content that reassure people about your expertise. Read more about building online trust here.

Build trust 3: Leverage referred trust

Clients that come to you from a referral are significantly less price sensitive than those who come to you ‘cold’. If you can generate more clients via referrals, your client base will be less price sensitive, and there might be scope to increase your rates. Use website testimonials in the same way to increase trust and reassurance.

Build trust 4: build personal trust

People choose to buy from people because of a sense of both personal trust and rapport (liking / affinity).  Invest in your personal communication skills to develop these, and pricing becomes less of an issue. The personal connection can make a massive difference.

Build trust 5: Increase pricing trust by demonstrating costs consciousness behaviours

Costs conscious practices are mindful at all times of the costs incurred in a matter, and give the impression of managing legal spend in the clients’ best interests, rather than seeking to increase costs wherever possible. Research by Beaton Capital suggests that costs consciousness accounts for approximately 40% of clients’ price sensitivity.

Costs conscious behaviours include genuine collaboration in setting fees, working with the client to reduce unnecessary work and costs, fixing or capping rates or proactively suggesting ways to reduce fees – anything to convince the client you are committed to their value and savings, rather than your profits.

Communicate value

Focus on the client’s objectives and how your work creates value for them. See more here


Finally – don’t be over-sensitive yourself to any downward pressure on fees!  You need to show confidence in your rates at all times. It is often just good practice for the client to haggle over fees. In fact, if you don’t get at least  5-10% of potential clients being reluctant to pay your fees, maybe you’re not charging enough. Often, downward pressure on fees is just a fact of life, not any proof that you’re charging too much.

The strategy should be to create the conditions whereby you can confidently charge a fair, profitable price for your work. Lay the groundwork for this by differentiating, building trust and reducing client price sensitivity.



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