The ROI of Price Stability


How much can your firm benefit from training on reducing price concessions? Law firms can easily gain an annual 1% improvement in revenues and, likely, much more by effectively handling price objections.
Using the following assumptions, replace the numbers provided with figures pulled from your firm’s billing data. The percentages are conservative and will often be higher. Regardless, once attorneys master the skills to resist pricing concessions, the percentages should double or even triple.

A rough ‘napkin’ calculation shows the benefit of managing discounts:

Firm annual revenues at full rack (standard) rate: $52,000,000
Percentage of firm revenues subject to discount agreements: 23.0

Actual revenues subject to discount agreement: $11,960,000
Average rate of discount percentage: 12.5%
Average lost revenues resulting from discounts: $2,750,800
First year recapture rate resulting from improved sales: +20%
Estimated recaptured revenues: $550,160
Discounts and price concessions are not a cost of doing business. They are a cost of not doing business well. A discount is often a reflection of the firm’s inability to convince clients of the value that the attorney or firm brings to the company. Firms who learn effective ways to justify the fees they charge by demonstrating the value they bring to their clients will enjoy higher profit margins than those who simply succumb to discount requests.


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Group Dewey Consulting | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.