There’s a well-understood notion that the value of one thing would possibly affect the notion folks have of that good or service. As an example, research have proven that folks would possibly understand faculties which have excessive tuition prices as being extra well-regarded than faculties which have decrease tuition prices as a result of it’s apparently believed that the upper price means that there’s a increased high quality related to the expense.
Equally, some purchasers might really feel that, if they’re paying increased hourly charges for his or her counsel, then they’re getting higher authorized companies than if that they had chosen attorneys who charged much less. Accordingly, it appears that evidently some purchasers would possibly really really feel extra comfy hiring counsel who cost increased charges than equal counsel who has a decrease billable-hour fee.
I first encountered this notion earlier in my profession once I was chatting with a companion about how he originated a shopper whom we charged higher-than-usual charges. The companion mentioned how he pitched our agency to the potential shopper after which acknowledged our hourly charges. The shopper appeared shocked at how low our charges had been and appeared to recommend that we’d be a very good match for this portfolio of labor however that the decrease charges conveyed that our agency won’t be the kind of store that would deal with the advanced matter our future shopper had. The purpose particular person we spoke to mentioned that he needed to pitch our agency to different folks on the enterprise who would possibly suppose he was cheaping out by hiring our agency which had decrease charges.
The companion mentioned that he thought on his toes shortly, and advised the shopper that these “introductory” charges would solely be charged for a sure interval. Afterward, the shopper could be charged the next fee for the work our agency carried out on the shopper’s enterprise. The shopper apparently appeared content material with this association and that’s how our agency allegedly originated this shopper. In fact, I’m not sure of the ethics of this all, and the story may need been embellished some by the companion (and misremembered by me practically a decade after I heard the story) however this instance is prime proof that some purchasers would possibly really feel extra comfy paying increased charges.
Extra just lately, I used to be speaking with a bunch of pros at a celebration, and it shortly grew to become recognized that I used to be an lawyer. One of many folks within the group talked about that he had just lately employed an lawyer to take a look at a posh employment settlement his employer had requested him to signal. This particular person requested me the hourly fee that my agency charged, presumably to see if he received a very good deal, and I advised him my agency’s typical hourly fee.
This particular person associated that his lawyer charged him practically double what my agency charged to carry out his authorized work. Nonetheless, quite than sound outraged, it was virtually like this particular person was bragging about this reality. This particular person I talked to gave the impression of he needed others to know that he was the form of man who may afford a costlier lawyer and that he was the form of man who would spend more money to verify he received top-notch companies. It appears paying increased authorized charges can typically mission some form of picture to others, and for that reason, sure purchasers won’t be too upset paying increased prices.
Typically purchasers might want to pay increased charges in order that they will cowl themselves or present somebody that they’re going out of their method to give them probably the most premium illustration attainable. One time, I used to be representing a shopper who was satisfied to take a plan of action that will be helpful to the shopper and a 3rd social gathering, however which may lead to litigation. This third social gathering agreed to indemnify my shopper and set him up with extraordinarily costly counsel that the third social gathering was going to pay for itself, topic to all of the conflict-of-interest waivers being so as. I questioned why the third social gathering had gone out of its method to rent a particularly costly regulation agency that simply charged double or greater than what my agency charged, however I feel they did it simply to provide the shopper confidence that this social gathering had his again. Though cheaper counsel doubtless may have carried out the trick, the optics of hiring an costly regulation agency may need been vital on this case.
All advised, most purchasers detest paying attorneys, and many consumers are joyful to pay attorneys the bottom charges attainable. Nonetheless, there could also be sure conditions during which purchasers would possibly really want paying increased authorized charges.
Jordan Rothman is a companion of The Rothman Legislation Agency, a full-service New York and New Jersey regulation agency. He’s additionally the founding father of Scholar Debt Diaries, a web site discussing how he paid off his scholar loans. You may attain Jordan by way of e-mail at [email protected].