Aderant recently released “The Emergence of Tigers and Bears and Other Law Firm Trends,” its third legal technology industry survey since 2010. Although the report focuses on technology investment, one question has focused on law firm pricing. The five-year trend is worth noting:
We could speculate endlessly on the reasons for the great disparity between small and large firms. I do think one observation is clear: large firms do a poor job articulating and defending their VALUE.
Besides an inability to pay (i.e., I don’t have the budget), the single greatest reason buyers have for not making a purchase is Willingness-To-Pay, which is tied to VALUE. If firms cannot articulate why the benefits they provide are greater than the client’s cost of the engagement, clients will react in one of two ways: 1) seek a price discount, or 2) seek the Next-Best Alternative.
Remember: A price objection is always tied to a concern about value. If you can prove value–or provide additional value–you can overcome the objection without lowering your price.
The report is available on the Aderant website: 2014 REPORT