Do you charge wealthier clients higher fees for the same work?

According to the Wall Street Journal, the Staples website quotes different prices for the same merchandise based on where the user is located when he visits the site. Staples said this is based on how close the visitor’s location is to a competitor’s store and various costs of doing business, but it appears to also be based on the customer’s ability to pay.

In New York, for example, certain products are priced higher in the boroughs of the Bronx, Manhattan, and Staten Island. By contrast, the same items sell in Brooklyn and Queens at a discount. These price differences come despite no more than 20 miles separating any two locations.

In other words, a Manhattan resident would save money on an item simply by driving to Queens and making the purchase there either online or through a mobile device.”

Apparently, this is not an uncommon practice among retailers.

It’s not illegal but is it “fair”? More importantly, is it smart business?

I think it is smart, and also fair. The retailer is entitled to charge whatever the market will bear. It’s called “free enterprise”. Where it gets dicey, however, is when customers learn about these practices and object to them. A retailer may win the pricing battle but lose the loyalty war.

Of course a savvy customer who knows about this practice might play the pricing game, logging onto web sites from different locations, to see which one gives him the lowest price.

Anyway, I got to thinking about this in terms of legal services. Is it smart business for a lawyer to charge different fees to different clients based on their ability to pay? From a business standpoint, I say why not?

If your clients don’t know (and there are no legal or ethical restrictions on doing so), why shouldn’t a lawyer be able to charge what the market will bear? Some attorneys routinely do precisely that. They size up a new client by their clothing or car or occupation and quote a fee commensurate with what they think that client can afford.

I can’t recall ever charging a client a higher fee because I thought he could afford it, but in looking back, had I thought about it, I probably would have. I sometimes charged clients lower fees, either because I wanted to help them out or because they were steady clients and I wanted to reward them for their allegiance. If there’s nothing wrong with this, there should be nothing wrong with charging some clients higher fees. Of course, by definition, charging some clients less means some clients are being charged more.

What do you think? Is there anything wrong with charging some clients more than others? Have you ever done it? Please share your thoughts in the comments.

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