I ask, because the best thing to tell clients/customers about rate changes is usually the truth. Unless the truth is so unpalatable as to be, well, ugly. In which case, I usually argue for slipping the knife in as quickly and quietly as possible; ie, don’t spin or communicate, just do it.
If you’re raising the rates because you haven’t done it in ten years, and you really want to be able to attract and keep the kind of legal talent that is needed to provide the highest level of service and support your clients have come to expect from you (by the way, feel free to steal shamelessly from that line), then that’s one thing. If, however, you’re raising rates in order to match an unexpected rise in firm costs (health care, facilities, IT, parking, absynthe), I suggest you try to find a way to lower those costs before saddling your clients with the burden. I have been shocked and amazed at the ability of law firms to raise rates when anything happens to affect the bottom line. There is a red-line on that gague, remember… and when you hit it, clients will seek help elsewhere.
That being said, if ya gotta raise rates, I’d highly reccomend that you do it in a more "opaque" manner than an across the board increase. When you just jack everybody’s per-hour rate up by 5% or 10% or something, it seems arbitrary. Hell, it is arbitrary, and we all know it. And it’s not just arbitrary, it’s goofy.
By adding opacity, I mean using a pricing strategy that is, essentially, harder for clients to fathom in 10 seconds or less. Raising everyone’s billing rate up 10% is as transparent as glass. My five-year-old could grasp that in 10 seconds. But… if you come up with a program that adjusts rates based on the types of work that are more in demand, the work that can be turned around more quickly, the work that has less breakage, etc. etc., you can affix a "customized" rate increase to each attorney’s work and communicate that number to his/her clients, along with an assesment that concludes that the reason for this increase is that his/her work has been judged to be more valuable, in part, due to the chance to work with exciting, interesting and attractive clients such as yourself. You can, in fact, work the numbers to come up with the exact same bottom-line profit change as you would with an across-the-board change, but you can make it seem like you are magic jugglers of complex numbers and factual balancers who are oh-so careful in the adjudication of subtle variances of legal fortitude. We know you ain’t, but you asked for spin, remember?
One thing I will caution against, and that is the "spread the pain" message. I’ve heard of several firms that basically say, "We’re gonna jack rates by 10%, but as a favor to you, we’re going to do it slowly; 5% this year, and 5% next year." That’s the most dumb-ass customer communications gaffe I’ve ever heard of. If you’re going to screw somebody, do it and get it over with. Or do half now, and half again next year… but don’t telegraph it ahead of time. It’s like telling somebody, "I’m going to punch you in the mouth now… and then, in a second or two, I’m gonna punch you in the gut." No, no, no, no, no, no, no, no, no. Just don’t do it.
PS: Better yet, switch to project-based billing. You’ll make more money, you’ll keep 10-15% more because of the time-value of money that ain’t in the WIP for 6 months and your clients won’t be worried that every time they call to ask a 10 second question that they’ll be getting a bill for 1/10 of an hour.
Stumble it!