Raising Rates Just Because Sure Way To Lose Some Clients

Developing the Next Generation of Rainmakers Raising Rates Just Because: Sure Way to Lose Some Clients For several years, my trusty assistant Joyce and I ate lunch almost every Tuesday at one of our favorite restaurants. It was a Tex-Mex Grill in far north Dallas. We traditionally dined there on Tuesday because the restaurant features “Double Punch Tuesdays” and we get two punches on our card. When we have 10, punches we get a free meal (up to a certain $$ amount), and with 20 punches we get two free meals. Several months ago after we were seated I noticed we had been handed new menus. I was excited to check out what they had added to the menu. As I skimmed through the new menu, I found the restaurant had not added any new dishes. Instead,  I found substantial price increases (some as much as 20%) on the same items. The longer I looked at the menu and realized I would be charged an additional $2.00 for one of my favorite lunch items, the more bothered I became.Finally, I looked at Joyce and suggested that we go somewhere else for lunch. She agreed and we were out of there and on the road in a jiffy. We never went back, not even on Tuesdays. Why? no one explained to us why the restaurant had raised prices and why the price increase was so dramatic. I remember the leaders in my old law firm demanding that I raise my rates each year. I hated the idea and protested. I told the leaders that just because we had entered a new year, that was not reason enough to increase rates. My clients would want to know why.  Had I become smarter by being a year older? Could I do their legal work more efficiently because I had gone from 31 to 32 years of experience? I asked the firm leaders to give me the “talking points” to explain why my rates would be higher going forward. Needless to say, I never received anything I could share with clients. I refused to raise my rates and told firm leaders I would just work harder. I left a fine restaurant and may not return simply because the restaurant had raised prices without explaining how we would get more for our money, or the circumstances that made the price increases necessary. Unless your firm is the “best in the world” and price is no object for your clients, when you raise your rates and provide nothing more than you provided before, you will alienate many clients, some of whom may leave you.     I practiced law for 37 years developing a national construction law practice representing some of the top highway and transportation construction contractors in the US.