Practical Responses to Client Demands for a Fee Cut

Firms respond in different ways to this dilemma. Some feel that there is no alternative but to agree because the recession has turned nearly all legal services into commodities. Others feel that the firm can push back by asserting the uniqueness of its practice and services, but this is a difficult point to prove ' most clients view all lawyers as equally qualified, and conversely (no matter what their own rhetoric) all lawyers can't be the best at their practices. Then there is the desperation strategy: Agree to the 10% rate cut, then pad the bill here and there to make up for it.

Clients are not always right; they can have unrealistic expectations or demands and still complain about everything. Shared expectations, effective communication, and dependable follow-through by lawyer and client all define the kind of good relationship that makes a fee cut demand unlikely. Sometimes, however, problems happen, and the choice seems to be between losing revenue and losing the client. The reality, though, is that the law firm has a variety of strategies that can address a client's need for ostensibly lower fees without putting the firm at a financial disadvantage. Following are four strategies to consider.