Fruitcake or Champagne? Just Say No to BigLaw Rate Increases
December has traditionally been the month when BigLaw delivers their annual unsavory “fruitcake” to clients – hourly rate increases. Susan Hackett has just written her “annual rant” – “Ending the Holiday Tradition of Outside Counsel Rate-Increase Letters” – a must-read for both clients and law firms alike. Since her fabulous article is rather long, and for those readers with little time to spare, I offer the following very brief synopsis:
- If you are a law firm contemplating reaching into the cookie jar just one last time – JUST DON’T DO IT! No. Really. No. Rate. Increases. Unh-uh. Your clients are finally ready to snap.
- [Slyly whispered] So what should you do if you really need to keep your gluttonous average P.P.P.’s above seven-figures? I suppose you can always fall back on the tried-and-true ruse of offering a rate discount, while quietly adding more time on the back end, for a net increase in overall fees. It’s tricks like these, apparently learned from P.T. Barnum, that some clients continue to fall for. Count yourself lucky if you have these clients – and pray they stay off blogs like these.
- If you are a client who receives another hard to swallow rate-increase – even if you have politely accepted these dense brick-loaves year after year – it’s finally time to dig in and deliver an emphatic “antler bash” to your outdated and out-of-touch firm. There are a myriad of options now available to clients that were not widely-available even a couple of years ago. Rather than stay mired in the inertia of the legal services model of the past, instead do as Ms. Hackett urges:
Throw away the fruitcake practices of the past. This holiday season, give yourself and your client the gift that keeps giving, by moving beyond the “rates” conversation to invest your firms in providing what you value, determining what the work is worth to you, and scoping the work and process you’re willing to pay your firms to deliver: on budget and aligned with your desired results.
Follow that advice my friends, and you will be drinking lots of champagne next holiday season celebrating the ROI for demanding value-based pricing over rate-based pricing.
Clients, we all need to toast Ms. Hackett for her excellent advice. Cheers.
Happy Holidays, indeed.