One way to generate more revenue for your law firm is to raise your fees. Assuming you already do this on a fairly regular basis, there is another way to increase income: tiered pricing. By offering different legal services at varying price points, you can cater to better clients and maximize revenue from those willing to pay more for additional value.

Think about the services you are rendering now and what you are charging for them. Is there a way that you can add additional, premium services for a higher fee? Is there a service that a more affluent client might find attractive? If you are not offering more to these clients, you were leaving money on the table.

Structuring & Positioning the Tiers

You have probably seen on websites for companies that offer various services that they have different packages. One is Package A, the cheapest, the second is Package B something moderately more expensive, and the third is Package C, which is significantly more expensive.

For example, A may be $100, B is $400, and C is $1,000. Studies have shown that most people, when presented with this type of tiered pricing, will pick B. You might even notice from these websites that the B package is marked with language like “Our Most Popular.” Statistically speaking it is, so they are not really lying, but by pointing this out to you, they are increasing their chances that you will pick the more expensive package. They’re leveraging the choice with social proof.

This “A-B-C” offer allows you to cater to different customer needs while maximizing revenue. Having an “A-B” or “A-B-C” offer makes it easier to close the sale as well. You can gauge price sensitivity by starting with the most expensive package and then dropping down if you get pushback. This avoids the need to “upsell” to more expensive packages if you have already quoted a lower price for the cheaper ones.

How Do You Do This?

The first thing you have to do is break down your potential clients into groups. Each will be a set of people with specific needs. Once you have identified them, you then create 2 to 3 service tiers that address those needs, each with distinct benefits and pricing.

It is very important to get clarity on exactly what services you will be rendering and the value that they will have to the potential client. Without a distinct value proposition, you won’t be able to justify the price difference. Once you have done this, you have to write marketing copy for your website, email campaign, ads, etc., that clearly communicates the benefits of each tier to your potential clients, emphasizing the added value of higher tiers.

Finally, you need to review regularly the performance of each tier and make adjustments as needed to optimize revenue and customer satisfaction. You may need to communicate the value proposition by tweaking the marketing language or by adjusting the pricing up or down.

For Example . . .

Let’s say you have an estate planning practice. Package A could be a basic plan with a will, power of attorney, and advanced medical directive. Nothing fancy; very basic. Package B could add a revocable living trust. Package C could be A with much more sophisticated trust documents, and D could be A with sophisticated trust documents and tax planning for very affluent clients.

I have a colleague that even includes a “kids package” for an additional fee which includes temporary guardianship documents for the care of minor children where the parents are alive, but unable to care for them for a while.

So as you can see, having tier pricing prevents a “one size fits all” fee structure, where a segment of your clients may well pay you more if you just lay out the value proposition.

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