Have you bought a Groupon or Living Social certificate to get a discount at a restaurant?

On the one hand, I’ve gone to restaurants I didn’t even know about before buying the discount certificate. On the other hand, I rarely have gone back and paid the full price.

What happens when law firms give discounts?

Giving discounts reminds me of Jos A. Bank. There is always a sale going on. A few years ago, I could have bought one sports coat or pair of slacks and gotten two for free. Over the years, when I bought something at the Jos A Bank store I was never sure I got the best deal.

If you give discounts, your clients will wonder if they are getting the best discount you give.

I never gave discounts. Instead, I gave extra services away at no cost.

For example, I offered to do workshops for my clients at no charge. I occasionally put associates in their office for a week at no charge.

I believe giving value for free is better than discounting fees. I also gave budgets for the work we were asked to do because I believed it was important for the client to be able to budget the outside fees.

I believe that:

  • 10% of legal work is bet the company and it goes to the best lawyers
  • 30% of work is commodity work and it goes to the lowest cost provider
  • 60% of legal work is based on relationships and it goes to the lawyer who is known, liked and trusted by the decision maker

Focus on either being the best in the world at something so you get the bet the company work, or focus on building relationships.

If you are doing commodity or routine work you better be able to do it cheaply.

Finally, if the economy demands it, lower your standard rate rather than giving a discount. If you do give a discount, you should anticipate your client will want a further discount when they receive your bill.

  • Cordell, in your post you said that instead of giving discounts, you, at times, would give away services for free. How do you make your clients aware that you are giving them free services?
    I’m asking this because I think it is important that the client is aware when you are giving them something of value.

  • I’d be inclined to offer services, but not position them as free. Instead, I offer them as a way of better meeting the client’s needs. I suspect that what Cordell is suggesting is based on better meeting the client’s needs, rather than positioning the services as free….or perhaps he means offering a loyalty reward or something along those lines. Am I right?