Prepare for Price Wars


It’s no secret that clients are demanding discounts, lower rates, and complete billing transparency. Law firms have responded by slashing their rates rather than risk losing clients to the competition. A race to the bottom has ensued, with firms underbidding each other. While effective in the short-run, slashing prices can be unsustainable. In fact, it’s suicidal.


Offering a bargain price up front poses a firm for an uphill battle against client expectations. Clients are likely to expect future discounts, whether because they are a “valuable client,” they have another firm knocking on their door offering reduced prices, or because a budgetary squeeze leaves them unable to pay for the extra associate hours incurred in a particular month. The deep initial cut leaves too little room to meet future client demands.


Start thinking strategy. A scalable workforce is one of the easiest ways to immediately offer competitive pricing and be perceived as an innovative and strategic thinker. A scalable workforce shrinks or grows seamlessly with your caseload. The result is reduced overcapacity, increased partner profits, and a reduction in overhead costs.

Building a scalable workforce requires planning and careful assessment of your firm’s unique needs. You will also need a mix of permanent and contract attorneys. While permanent associates form your core team, contract attorneys can be brought on to handle emergent unforeseen needs, or temporary foreseen needs that do not justify hiring a full-time associate. This flexibility is key to making discount pricing work.  

A law firm can offer competitive pricing by staying lean with a core team while leveraging the manpower and expertise of contract attorneys. Pro tip: You should hire a contract attorney if the billable time of current full-time employees is below 85% and the profit margins are below 50%.

Want to see how many firms are using scalable staffing? Download our infographic now to see if you’re ahead of the pack.