Bankruptcy lawyers are seeing fewer clients now than was the case a year ago. We’re seeing lots of new attorneys enter the field and, offering lower fees as part of their legal marketing efforts. Smart move, or just a race to the bottom?
The first thing everyone did when the bankruptcy law changed back in 2005 was to jack up prices. Then they got scared because there weren’t any new clients. So they dropped prices again. The clients still didn’t come back, so they dropped those pesky prices even more. Lo and behold, everyone started competing on price in the hopes that the clients would come back.
Then the economic meltdown hit, and lawyers in other practice areas jumped into bankruptcy. Their marketing was aggressive, their web presences massive and their blogging efforts impressive. They were young and fast, hitting social media hard. Experienced bankruptcy lawyers accustomed to the old ways of marketing a law firm saw their client numbers shrinking fast.
In response, lots of you started cutting fees as well. In doing so, the bankruptcy bar began duking it out for the lowest-price lawyer on the block. Wal-Mart for legal services, that’s what it felt like.
But as Seth Godin says, “Cheaper is the last refuge of the person who’s not a very good marketer. Cheaper is easy and cheaper is fast and cheaper is linear and cheaper is easy to do properly, at least at first.” If you compete on price, you’re likely to lose – it’s easy for some chucklehead to come along and undercut you by $10.
I know, that’s how I started out over a 15 years ago.
Yup, I was the snot-nosed punk kid charging an absurdly low fee for a Chapter 7 bankruptcy case. And guess what? I was busy as all heck! Gee, life was terrific for me. I had a boatload of clients, my phone rang off the hook, and I was in the office every hour I wasn’t asleep.
The problem was that I was starving. Absolutely, positively dead broke. My clients were grumbly and nasty sorts who were never happy with the work I did for them, my advertising bill was enormous, and I was constantly looking over my shoulder to make sure someone wasn’t low-balling me to steal my thunder.
Then, one day, it happened. Some snot-nosed punk came along and started eating my lunch. Undercut me by $1, too. My phones stopped ringing, the waiting room emptied, and I got scared. So I did the thing all of my marketing books told me to do – I raised my legal fees, took pricing out of my ads, and started spending a ton of time with every client I had.
OK, you guessed the end of this story. I raised my legal fees 200% over the next year, filed 30% fewer cases during that time period, and started getting referrals from my clients because I was suddently doing a really good job for grateful people who valued my work and were willing to pay for my expertise. I asked for referrals, and they were happy to give them. They called to ask me to send more business cards when they ran out of them, in fact. My adveritising bill plummeted, and I got home for dinner more often.
The snot-nosed punk who stole my thunder by charging lower fees? Someone came along and undercut his fees, and he’s in another line of work now.
For as long as I’ve thought about marketing, I’ve said I don’t compete on price. My goal is to deliver quality service, and if price is the most important thing to you, go elsewhere. It seems to work.
Since the 05 changes, I’ve not had a client argue about my fees which are nearly double my pre Oct. 05 level. Some can’t pay and we talk about 13, but no one argues that the work isn’t worth the fee.
Cathy Moran
For as long as I've thought about marketing, I've said I don't compete on price. My goal is to deliver quality service, and if price is the most important thing to you, go elsewhere. It seems to work.
Since the 05 changes, I've not had a client argue about my fees which are nearly double my pre Oct. 05 level. Some can't pay and we talk about 13, but no one argues that the work isn't worth the fee.
Cathy Moran