Well, the answer to this partly depends on what your definition of “slashing” is. If you're thinking of shaving 10 percent off your rates for a new client, that may not be a bad idea, especially if you're desperate.
But if you're considering cutting your rates in half—say, charging $150 an hour for a divorce instead of $300—the cure will literally be worse than the disease. Why? Well, for starters:
- People don't shop for lawyers the way they shop for furniture. If you offer your services at a steep discount, they'll wonder what's “wrong” with you.
- You need to pay your bills, just like everyone else. If you take a hit on your hourly fees, you'll just dig yourself deeper into a financial hole.
- If you do sign a new client at the reduced rate, he may defect to another lawyer as soon as you raise your rates back to your normal level.
- You may get into trouble with your state bar committee, which probably won't appreciate your aggressive (and undignified) marketing tactics.
- You'll also get in trouble with your fellow lawyers, who have an interest in maintaining a minimum hourly rate and won't appreciate your attempt to undercut them.
- You will attract the wrong kind of clients. Those clients looking for a bargin are generally the most difficult to work with.
- Reduced prices will hurt your bottom line. You may get one or two new clients, but if they are paying little, you won't help your profits.
If you can't lower your rates to attract new clients to your legal practice, what can you do? Well, that's a complicated question, and one that requires a complicated, many-pronged solution.