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Neurogenetics of pricing: Why fee discounts destroy client loyalty

Law firms that regularly discount the price of their services are more likely to lose clients to competitors, warn Bob Murray and Alicia Fortinberry

23 April 2015

Pricing is one of the biggest concerns facing law firms in the 'new normal' of constantly-fluctuating client needs and loyalty. Since 2007, demand for external legal services has flattened and, as a result, fees have plateaued.

One of the reasons for this is the higher volume of discounts being given by major law firms to preferred customers in order to retain their loyalty and the firm's market share. Another is that many legal services are increasingly seen as a commodity and so the brands of individual law firms are far less important than they were. Without a strongly differentiated brand and a credible value proposition, law firms often feel that there is little to compete on except price.

In this article, we will explore the neuroscience behind pricing and why discounts are counterintuitive for those areas of...

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