The Right Way to Communicate High Hourly Rates


Wednesday, November 4th, 2020
By Gideon Grunfeld


When you charge higher hourly rates than most of your competitors, it’s important to understand how you can effectively justify this number to prospective clients.

The first rule of quoting fees to potential clients is not to mention a specific hourly rate until you and the client have discussed what is at stake for them. Your hourly rate might be fifty times the minimum wage, which could seem outrageous to a prospective client in the framework of money for time spent. For this reason, you need to discuss the context of the representation. If you charge $600/hour – or the equivalent of $10 per minute – that could sound unreasonable unless the client has a $10 million business deal or potential jail time on the line.

Secondly, reframe the discussion to focus on total cost and costs relative to the client’s exposure or potential upside. Lawyers have been conditioned to discuss their fees in terms of hourly rates, but this is counterproductive when your hourly rates are higher than your competitors’. Instead, educate the prospective client about their total cost, cost per phase of the representation, or cost per month. Any of these options will make a lot more sense to a client than the hourly rate alone. Discussing fees this way will also allow you to showcase that a higher hourly rate doesn’t necessarily translate to a higher overall cost.

Third, and perhaps most importantly, emphasize your expertise and what makes you well positioned to solve the client’s problem. When lawyers focus too much on their hourly rates, it can have the unintended consequence of reinforcing the idea in the client’s mind that competing lawyers are essentially the same. If the client feels that they are choosing between apples, the lower-priced apple is likely to win out. That is why highlighting your specific expertise, in addition to focusing on total costs, is so important when your hourly rates are higher.


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