When it comes to initial consultations for your firm. The ideal conversion rate for turning initial client consultations into clients is not 100%. It’s counterintuitive, I know. It seems like if a potential client shows up in your office who needs the kind of legal help you provide, that it is some kind of failure if they don’t hire you. It feels bad. Like you’ve been rejected.
That’s the wrong way of looking at it. It’s prioritizing an emotional frame over an analytical one. You’d think we, as lawyers, wouldn’t often prioritize emotions over analysis, but when it comes to managing the risk and rejection of initial client meetings (which the rest of the world calls “sales”), you’d be wrong. I talk all the time with lawyers who strive for a perfect 100% conversion rate. It’s the very definition of the perfect being the enemy of the good.
If you have an initial consultation conversion rate of 100%, or close to it, you very likely are charging fees that are too low. If you have the bandwidth to take on each one of those clients who retains, you very likely have a business development shortfall producing too few initial consultations each month.
If you have an initial consultation rate of 100% and you are able to take on each one of the clients who retains and you are bringing home a fair salary with a decent work-life balance… you are a unicorn. I’ve never met a lawyer in that situation. Skip the rest of the article and buy a celebratory coffee.
Much more common, when a lawyer tells me in the course of our work together, that nearly every client who comes in for an initial consultation retains, that lawyer follows that up by saying, “but I’m working way too hard and not making enough money.”
“When is the last time you raised your fees?” I ask. Awkward silence, followed by an explanation of the legal fee setting microclimate in their particular town and practice area and why it is actually impossible for them to raise fees.
I get it. Raising fees is scary. What if nobody ever hires you again once you raise them? What if the only reason anyone ever hired you was because of the value of your billing rates? I struggle with all those same concerns myself. Most people do.
The thing is, you may be right. Raising your fees may not work. It may not improve your practice’s financial performance. (Except it will.) You’re not going to know until you take the risk and try.
I usually suggest that my clients begin by raising their rates a modest 3% or so. Particularly in the current inflationary climate, it’s hard to fault any lawyer for raising rates a bit. If you’re not currently tracking the data for initial consultations that convert into new clients, this is a perfect time to add that metric to the top of your KPI list.
Think of it as an experiment and yourself as a scientist. Figuring out whether the experiment succeeded straightforward math: if the raised fees more than offsets the loss of revenue from the drop in your conversion rates (assuming there is one), then the experiment was a success.
You’ve listened to your market. Your reward is you get paid a little bit more for presumably doing a little bit less volume of work. Your client’s reward is they get a lawyer who is very slightly less harried than you were last week.
Sometimes, perfect isn’t so perfect after all.