When marketing leads to price-fixing.

Blawgletter recently got an email about lawyer marketing.  It included an article that promised help on getting "’top dollar’ for your work", avoiding "under pricing yourself", and overcoming the fear of "rais[ing] your fees".

Hmmm.  But as we skimmed down the html page, alarm bells started going off.  For under the rubric of "The Market Method of Pricing", the author offered these suggestions (with emphasis ours):

[The market method] is a good way of determining pricing. Get your assistant to support you in this task and spend time discovering what the range of pricing is in the community.

Have your assistant do a "mystery shopper" study by calling around as if he/she were a potential client. Find out what your competitors say on the phone around pricing. Your assistant may need to call from his/her home phone to avoid caller ID. As another option, you could have him/her call other legal assistants or paralegals at your competitors’ firms and offer to exchange your fees for their fees — or you could do that yourself with other lawyers in your market.

If you really want to get into it and have maximum data, write to a few dozen competitors in your marketplace and say you are doing a fee survey. Explain that if they would send you their fee list, you will create a composite list that does not identify those responding and send them a copy of the results. To keep it simple for them, include a stamped, self-addressed envelope with a list of the most common services offered in your practice area.

Now you will see what people are charging for services similar to those you offer. You should be able to come up with a range of fees. Use this range to set fees for your own services. My recommendation in law firm marketing planning is to charge at the 75% level of the list. So you should be at or in the top 25% of the fees.

Remember that in general it is not a good practice strategy to compete on price. Most potential clients will see pricing that is too low as a signal that there is something missing either from the service, the provider, or the firm. And people who are looking for a low price will follow that low price wherever they can find it rather than becoming long-term clients. So be sure that your price covers your costs and a reasonable profit margin.

We doubt the marketing guru intended anything untoward.  And unless the surveying activity results in an agreement among competitors to fix, maintain, or stabilize prices, nothing illegal may have happened.  But systematically collecting and sharing competitors’ pricing data can lead to just such a thing.

Which section 1 of the Sherman Act forbids.

Feedicon And we wouldn’t want that.