Stop Undercharging: An Estate Planning Lawyer’s Guide to Value-Based Pricing
I may be sticking my nose into the business side of your estate planning practice here, but my goal is to help you set yourself up for total success by the end of the financial year.
You might be seeing all those price rise emails hitting your inbox right now, with everyone pushing their rates up just a little bit more. We are in a cost-of-living crisis, and inflationary pressures are real.
Is it time you raised your prices, too? I would love for you to make a conscious decision about whether it is time for a fee increase. When was the last time you actually updated your rates? As your service delivery costs rise without a corresponding price adjustment, your bottom line takes the hit. Are you simply absorbing those costs for your clients and putting your take-home pay at risk?
Prefer to listen instead? Check out Episode #38 of The Art of Estate Planning Podcast, where I discuss strategic guideposts for raising your estate planning fees.
3 Signs It Might Be Time to Raise Your Estate Planning Fees
1. You are booked out, stressed out, and overwhelmed.
Feeling "super busy" is a sign that you are spreading yourself too thin.
When you are constantly at capacity, it is a clear indicator that your services are in high demand and undervalued.
2. You are attracting difficult clients.
An influx of "difficult" clients (at least, in your eyes) often happens when your pricing does not align with your ideal client demographic.
Increasing your rates is a natural way to filter out those who are not the right fit for your service, allowing you to reach that "sweet spot" where you have enough work, but also the space to serve your clients well.
If you feel a growing resentment towards particular clients, it might be time to revisit your ideal client avatar so that you can align your services to attract people that you enjoy serving.
3. You are frequently told how "affordable" you are.
Is being "affordable" truly in alignment with your brand?
If it is the only reason people refer work to you, it could be a problem.
“Someone has to be the most expensive. Why can't it be you?”
It may feel counter-intuitive, but it is human behaviour to equate higher prices with higher-quality service.
It might take a little expectation adjustment where clients may take a little longer to accept their fee proposal than you are used to, but aren’t you overwhelmed and booked out anyway?
What Is the Right Price?
In our Estate Planning Pricing Toolkit, we provide detailed training on value pricing theory. Essentially, it is about matching value, and pricing your services to reflect the results you deliver. It is a win-win exchange of value between the client and you as the lawyer.
What’s the minimum price you need to charge to break even?
Our Estate Planning Pricing Toolkit includes a user-friendly Break-Even Calculator.
It helps you determine the minimum price you must charge to achieve your desired profit, factoring in your fixed and variable costs, GST, Super, and Income Tax obligations.
Essentially, it accounts for the full cost of running your law firm, including paying yourself your desired living wage, and the projected cost of hiring someone else to perform those same tasks if you were not able to work.
Our Break-Even Calculator serves as a vital reality check by showing you exactly what it costs to deliver your firm’s services.
Marketing Strategy Done with Integrity
If you made the decision that it is time to increase your estate planning prices, I do not want you to simply raise your prices in secret.
This transition should be a well-thought-out marketing strategy rooted in integrity.
Clear communication and being open and transparent are the best ways to raise your prices with professional integrity.
Firstly, I suggest informing everyone about the upcoming price increase.
Explain the reasoning – for instance, that your rates are rising because your expertise and experience are growing every year, and the costs of running your firm have increased.
Those who do not respect your decision likely are not your ideal clients anyway.
It is also the perfect opportunity to build a marketing campaign around the price rise. Let your existing prospective clients know that if they sign a costs agreement with you before the price rise, they can lock in the current rates. It may just be the motivation that they have been needing to overcome their inertia and take action.
New Prices? Time for a New Costs Agreement
This is an ideal time to discuss the costs agreement terms included in the Estate Planning Pricing Toolkit.
At The Art of Estate Planning we have developed costs agreement terms specifically tailored to estate planning and the unique issues that can arise in these matters. These terms include clear parameters regarding how long a quote or fee proposal remains valid before it expires, the client's obligation to communicate with you, how many times you will follow up, and when new pricing applies.
This protects your firm from clients who accept a quote but drag their heels to provide instructions or funds in trust, as well as setting an expiry date on your fee proposals so that you have the right to requote with your current fees for prospective clients who do not sign the fee proposal until years down the track and you are not bound to honour out-of-date prices.
Pricing is an emotional topic, but it is essential for running a business. Clients will not respect or see the value in your service if you do not recognise that value yourself.
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