4 Reasons Why Prestige Doesn’t Justify Your Fees: Your Law Firm Proposal Needs Better Differentiators

There you are, in your office, the night before your proposal is due, with the cursor flashing on your screen. And she’s looking at questions 1 and 2 of the Request for Proposal.

Q1. “What are your hourly rates?”

Q2. “How do you justify your hourly rates?”

When I consult with legal clients about their proposals, differentiating themselves is always the hardest part for them. Experience? Good results? Happy customers? Lawyer biographies? Yes, they do, but so do all the other big companies they compete against. So how do you stand out? How do you get the customer to choose you? Most importantly, how do you justify those fees?

Without a structured process, most clients simply give up. You quote the same things everyone else quotes, hope for the best, and then dabble in a bit of that Biglaw magic bullet: prestige.

Oh yeah. What is prestige for these days in the spot market? Can you buy a full bucket?

Does it work this way? No problem. But every RFP that goes out gets a dozen pitches about the company’s history and prestige.

To the proponent, this makes a lot of sense. After all, who is the customer to say what is and is not prestigious? It is a matter of opinion.

However, think about it. Is your unprovable and unprovable opinion a solid basis on which to justify hourly rates in a proposal to the very person you want to pay them to?

And is it something you even want to claim? To me, there are six very good reasons why they should drop this word from their legal proposals.

Can’t we just give him a little prestige?

A proposal is a sales document. So what you say in it affects the reader’s opinions of your company.

And a proposal can enhance the dignity of an excellent firm in the eyes of the client. In the end, however, for a proposal to ring true, it must reflect the real character of your law firm. Now, a law firm can certainly enhance your reputation if you are willing to pay the price to do so. But trying to claim the mantle without paying the price will quickly be discovered. Also, the customer won’t appreciate you passing off normalcy as the pinnacle of quality. thats false

There are firms that have been recognized as prestigious through decades of unsurpassed results, the highest standards and excellent customer service. And there are firms that have entered the club in much less time, spending what was needed on tables at charity dinners and evenings and Monets and other forms of advertising that the legal world considers acceptable. A hundred years on one side and ten or twenty on the other.

Well, heck, if those guys can be considered prestigious, why can’t we? We can use the same thick paper on our Christmas cards and serve the same fancy wine at parties for customers.

The problem, however, is that prestige is a specific choice. And if you haven’t made that decision all along, you can’t justify your rates by quoting them now. Nobody will believe you. Why?

You’re really not prestigious

Expensive, yes. Prestigious, no.

The types of clients that use RFP are not stupid. They are Fortune 500 companies. They pay their executives very well. They know what prestige is.

Some attorneys argue that they can claim prestige by virtue of their fees. This gets it all backwards, of course. But, even more critically, these spells must realize that they are not really willing to pay the price of prestige.

Prestige is not measured by the number of partners who claim to bill $1,000 per hour. You are in a culture of adhering to the highest standards, even when no one is looking. It is a desire to give up profits now for the sake of goodwill later. It’s making sure that even your new associates and paralegals understand that there is no such thing as routine. No email routine. No routine phone calls. No routine presentation.

The price of prestige is the way the receptionist answers the phone, the way even the UPS guy is greeted in the lobby. It is the way a young litigant interacts with opposing counsel in court.

In other words, the price of prestige is doing whatever it takes to earn prestige. Hourly rates are not part of that equation.

Your Clients Don’t Want Prestige

Still, some lawyers want to boost prestige and give it up so clients can justify their fees. Is that a good choice?

If you choose to present yourself as prestigious in your proposals, does that fit with the clients you are trying to win? Does it harmonize with your business, values, goals, hobbies?

Not likely. When I ask the training participants to name some prestigious companies, the same one always comes first. Try it yourself. Who are you thinking?

The company that people mention the most is Rolls Royce.

Most people, even wealthy people, don’t own a Rolls Royce. Why not? Wouldn’t you like one? Sure. But they have many, many things that they want to achieve before they buy a Rolls Royce. They prefer that their children go to the best possible schools. They prefer to have a beach house as a place where the family can have fun together. They prefer to splurge on tickets to take their friend to the Super Bowl. But a Rolls Royce? They are happy with their Lexus or BMW or other luxury car. The extra that a Rolls Royce offers – prestige, essentially – is simply not that valuable to most people.

And that’s with your own money. If they rarely get a Rolls Royce for themselves, you can be sure they won’t be buying Rolls Royces for your business. Does Home Depot use Rolls Royce as a company car? Staples?

So why would you want to sell yourself like the Rolls Royce of law firms when responding to an RFP? And yet, a Google search for “prestigious law firm” returns more than two million results. Clearly, companies are doing just that.

This is not to say that you can’t justify your Biglaw fees. But if your customers are truck people, you won’t surprise them with a Rolls Royce. Instead, you’ll just make them think: 1) you’re very, very different from them and 2) you spend a lot of money on stupid things. Does a customer want to pay for stupid things through his sky-high fees? No way. He will pay for quality, results, experience and many other things, but prestige is not one of them.

Prestige is not as good as it seems

I remember appearing before a judge in a pro bono matter I was handling as a young associate when I was at Simpson Thacher, generally considered one of the most prestigious firms in the world.

He had been before her many times before. But this particular time, the things she said made it clear that she had no idea that we represented our client pro bono. Now our client was a sweet little old lady who had been forced out of her home by unscrupulous predatory lending. And here she was represented by Simpson Thacher, a giant international law firm, a leading advisor to investment banks, brokerages and insurers. It was all so obvious. (Not to mention it was written on the front of all of our pleadings, but the judges reading the documents is another matter entirely.)

At that moment, it became incredibly clear that he had never heard of us before. For me, this was eye-opening. Green as it was, I assumed that the judges came from elite schools and that the students of the elite schools knew the elite companies.

No. The company name meant squat to her. If it meant squatting to her, was there any value to customers? Perhaps at the appellate court level. Perhaps in federal courts rather than state. But not as much as most Biglaw attorneys would like. And that’s for a firm that has survived at the top of the New York legal community for a hundred years. Who are those other two million Google visits talking about?

Find other ways to justify the price

There is a wide gap between a Ford Festiva and a Rolls Royce. This is the area where you can honestly and proudly describe the character and value of your company. The critical task in your proposal is to justify your rates by representing your company well, not misrepresenting it. This means your rates need more tangible benefits to rest. Customer-centric benefits include your:

Sensitivity

clear communication

Quality assurance

· Project management skills

operational efficiency

Speed

Alternative fee structures

Experience with your specific industry

Experience with that specific type of client

· Expertise

Value added

You should of course be able to back these up when the client asks for details. If you can’t say something like, “Yes, all of our attorneys and paralegals receive three hours of project management training, one hour of management training, two hours of quality control training, and two hours of clear communication training with the client, then you cannot list them in your proposal as aspects that justify your prices.

The reality is that most companies get by on their experience alone and they can do it because everyone else is doing it too. But as large clients are moving to RFP use, they are also much more willing to take a chance on smaller companies that are willing and able to deliver value in other ways. And as more law firms realize the value of a persuasive proposal, fewer competitors will be left playing the me-too game with your firm. In other words, the days of Biglaw’s fees being justified by experience and a prestige cover-up are clearly over.

Prestige has its uses, but it takes very few signatures to satisfy the occasional Sultan or Blue Blood. It’s time you found a better way to sell your legal services.