We’ve all been there - we’ve had a really good scoping conversation with our client or prospect, where we’ve uncovered the main terms of the matter, we’ve told the client or prospect that we can do the work and we know they like us because they’ve laughed at all of our jokes.

We confidently go in with our price and get the standard response: “Ooh, that’s a bit steep, can you go lower?”

Now, there are two reasons why your client or prospect will be asking that question:

They have got a quote from a competitor; or

They’ve worked with you before and they know this is the dance they go through with you before you come down to a figure they are happy with.

If there’s a competitor waiting in the wings, it can be tempting to drop your price in order to keep the client, especially as we know there are law firms out there that will do the work for ridiculous prices where it’s actually impossible to do the work with any level of service included.

Here’s the problem: drop your price once and your client will be asking for a discount forever, which then leaves you with only two options: one, at the next negotiation, start really high in the hope that the client doesn’t run screaming without bothering to ask you to drop the price; or two, accept that this will be a client who will squeeze your margins from now on.

But here’s the most important factor: this client sees you as a commodity, so feels no loyalty towards you. They don’t value the work you do, so the moment a competitor comes along with a price you can’t beat, that client is gone.

There’s only one way to solve your commodity-discount problem: you need to move your conversations away from price and offer a complete service that makes you a trusted advisor. That doesn’t mean you have to be a full-service law firm - it means that, where you or your colleagues can’t do the work, you use your network of contacts to find someone who can.

And most importantly, you have to understand your client and their needs so well that the advice you give them is personalised and the client sees you as an important part of their team, values the work you do for them and - here it comes - pays you what you tell them your advice is worth. 

That means you have to know and be able to articulate your own value, particularly how it relates to each individual client and their circumstances. That takes patience, research and time with your clients, but ask yourself this: if you aren’t taking the time to understand your client, why should they take the time to understand your fees?

Think about how you add value to matters - it is so much more than drafting the documents. What you’ll realise is that explaining this to clients only takes a few minutes, but makes a big difference.

You also have to know the value of the transaction to the client - not just what success looks like, but failure too. If they are cost-conscious, imagine the cost of not using you? What will happen when they put price before value once too often?

If you’ve done your job during your initial conversation with the client, you’ll have separated your offering from your competitors’ - they’ll understand the value you bring to them and their matter.

This is really important: it’s not anyone else’s job to educate your client, to explain why what you do helps avoid some kind of pain, overcome a challenge or build towards a strategic gain - it’s yours.

Understanding and articulating your value - and becoming a trusted advisor - is the best way out of the price negotiation hole.

Will this work for every client? No, but it will work much better than being beaten down on price.