Posted In: Strategy
What To Do When Your Prospect Objects To Your Fee
Fee objections happen often, but they are not always what they seem. Next time a prospect objects to your firm’s fees, think about the following questions:
Is it real? Is it time? Is there something else? Is that all?
Is it real?
Fee objections are often merely rants. No one likes to pay lawyer fees. They don’t add to the bottom line, it’s hard to budget for them, and they are often unpredictable. A prospect’s objection may simply be a complaint about lawyer fees in general or may be an attempt to make you think he or she is not a pushover. A prospect may be feeling pressure from a stingy superior or may just feel the need to bring up his or her awareness of alternative fee arrangements. How do you tell if the objection is authentic or just plain venting? The answer is: be quiet.
As lawyers, we are trained to be skeptical, make an argument, and be convincing. Don’t get caught in that trap when responding to a fee objection. If the objection is not real, you may inadvertently convince the prospect that it is real by drawing him into an argument before you’ve had a chance to discuss how you might help him. Have the courage to take a deep breath and defer the fee discussion until you know the prospect’s objection is real. Calmly looking your prospect in the eye and waiting 3 seconds may seem awkward at first, but it can work wonders. People can’t stand silence, and a prospect may fill that silence with excuses or explanations about the objection. In that moment, you may find out whether it’s truly important.
Some say that the only way to determine whether an objection is real is to let it surface multiple times. Acknowledge the concern, and defer it to later. If it comes up two more times, there is probably a genuine problem with the fee. You will have to deal with it, but on your terms and at the right time.
An easy formula veteran rainmakers often use to slow down and reframe the fee discussion is called, “Feel, Felt, Found.”
This is how it works:
“Your fees are way too high; I don’t think we can afford to hire you.”
“I understand how you feel. Some of our current clients felt the same way when we first began working with them. What they found was… (insert value statement here)”
Is it time?
Once it is clear your prospect has a valid problem with your fee, think about whether this is really the appropriate time to discuss fees. After all, if your capabilities do not match the prospect’s needs, you may not even get to your fee. Fees are only relevant in the context of your capabilities as a firm and what you can do for a new client. (Assume I offer to sell you a boat for $10,000. You probably won’t agree to the sale before you conclude that the boat is worth the money I am asking. You may have questions like, how big is the boat? What kind of condition is it in? Do I need or want a boat?) It’s common sense to establish the worth of something before you ask someone to buy it.
Before you address fee objections directly, give yourself the chance to demonstrate your value to the prospect. Compliment the client on the question, display a willingness to help the prospect resolve the issue, suggest the two of you deal with it at a more appropriate time, and then reassure the client that they will see the value of hiring you.
“I am glad you brought that up. We have several issues to consider, and I prefer to discuss fees when we have a complete understanding of the entire matter. I’m sure we can come up with something that will be feasible for us both,” or,
“That’s a good point; we should look at fees. I should connect with my partners and ensure we are setting the fee at an agreeable rate for us both. I know we can create a fee structure that will work. Can we discuss it at our meeting on Friday?”
Is there something else?
True objections are often hidden beneath the words that are said. Try to ascertain where the objection originates. Do they not believe in the value of your service? Are they interested in shifting the risk of high costs to you due to the uncertainty of litigation? Do they not trust you? Are they comparing you to a cheaper alternative? Understanding the origin of the problem will go a long way toward reaching a resolution that is mutually agreeable.
Is that all?
Make sure you understand the entire objection. Don’t let any straggling issues or concerns raise their heads when you are an inch away from sealing the deal. This is often called “corralling the objection.” Have the prospect explain the exact objection, and identify what is possibly excluded from that objection so these additional issues don’t surface later.
This may also be the time to find out if there are any other misgivings about working with your firm. Dealing with any objection gives you a chance to uncover other hidden objections (and there are almost always other hidden objections). “Is there anything else?” “If money were no object, are we the firm you would like to have work with you on this deal?” “Is this the only thing that stands in the way of you becoming our client?”
If the objection has survived the four questions, the time is right to deal with the objection appropriately. By now, you know your prospect has a real concern, you’ve taken the time to build the value of your service, you’ve uncovered and are ready to deal with the real reason for the objection, and you’ve corralled the objection so that affiliated issues will not come up later.
Once you show the value for your services and how they warrant the fee, it may become less of an issue and you can move past it. However, if the fee is still a stumbling block and you’ve discovered you are being compared to a competitor, now is the time to do what they taught you in law school and “distinguish on the facts.” Return to your value conversation and add elements that show the value you offer compared to others.
Most objections don’t survive this approach, but the reality is that at some point, you may have to decide to discount or walk away. Only you can determine how much the business is worth to you and how much damage (both long and short term) discounting will do to you. If you determine that discounting is your approach, remember that discounting comes in many forms: lower fees for the first year to build trust (with a guarantee of collecting your regular fee after a period), or alternative approaches that shift the risk to you but grant you your full rate if you hit certain milestones or caps to limit the yearly amount charged to the client or bonuses for certain results. Be creative and aspire to a solution that works for both you and the prospect.
Taking your fee objections through this process may seem awkward at first, but making sure the objection is real, dealt with at the right time, fully understood, and “corralled” will help you get the rate you deserve and ultimately make for a happy client.