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April 30, 2012 / Steve Hennigs

Legal services are sold on value, not price. Correct?

There is a discussion going on in the Legal Marketing LinkedIn Group about whether or not law firms should embrace the idea of providing coupons for their services.

Now I do not work in a law firm nor am I a lawyer so take my opinions how you will but this seems crazy to me. What I have come to understand in observing the opinions of respected individuals in the legal community is that people hire a lawyer based on the value that a lawyer brings to their situation and that price is a smaller factor in a decision.

When selling anything that is not a commodity (and even some items that are) it is an old rule of thumb to sell on value and to avoid selling on price. If you start selling on price there will always be someone else who comes along and sells at rate lower than yours effectively taking that work from you.

Marketing guru and author Seth Godin recently wrote the following short blog post:

“It might be that low prices are the final refuge of the marketer who has run out of ideas and is left with nothing but a commodity.

Or it might be that organizing your business around lowering prices through efficiency, mass scale and smart choices is a powerful way to grow.

My guess is that both are true, but you better be really sure about which one you’re choosing. Hint: doing the second one successfully is really quite difficult, so if all you’re doing is writing a lower number on the pricetags, you’re probably playing the first game.”

 If law firms begin offering coupons for their service then they are starting the proverbial race to the bottom  which is the easy way out and an unsustainable model. I would challenge firms to find more creative and valuable solutions like improving client service and/or offering alternative fee arrangements. These actions and others like them may take time and be harder to implement but add a great deal of value and will be much more successful in the long run by not cheapening a valuable service such as quality legal advice.

I urge you to check out the discussion in the LinkedIn Group if you can and it would be great to receive a few comments on this post as well. I am very interested in hearing what those who work day in and day out in the legal profession think in regards to this topic.

As always, thanks for reading!

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