“I thought it was £1.20.” I responded, a bit puzzled. “Isn’t that what the sign says?”
“Yes sir, but you asked for a cup. That’s an extra pound.” she said as she glanced over my shoulder at the growing queue.
“So coffee is £2.20? You said it was £8.42?” I asked as I nudged the steaming cup back towards her.
“Sir, the coffee is £1.20. The cup is another pound, milk and sugar are optional extras. Plus, we had to pour it for you. And don’t forget the bathroom service and heating surcharges.” she explained.
“Bathroom? Heating surcharges? You’d like me to pay for heating the restaurant?” I grumbled.
“Don’t be silly sir, of course we heat the restaurant for free,” she said plainly. “But unless you’d like your coffee cold, we have to charge you for warming your coffee.”
Leaving the coffee on the counter, I turned and headed for the door.
Hard to Imagine
It is hard to imagine any business pricing their products and services like this coffee shop, but look no further than the legal industry. Many legal firms seem to have deliberately gone out of their way to price their products and services in the most confusing manner possible. Customers may put a premium on simplicity and transparency in the post credit-crunch business world, but it seems that the majority of the legal industry still hasn’t caught on.
For example, check out this offer from a "Fixed Price" legal services provider.
“Shareholder's Agreement for just £499 !"
Sounds great value, right? So what’s the catch?
The Agreement is only for 2 shareholders. Each additional shareholder adds a further £50
You also need to take company secretarial services with the firm to qualify for the "Offer".
To amend the Shareholders' Agreement you need to adjust the articles of association, that costs a further £150
Board minutes are also required, another £100 for a simple set
That £499 is going to cost you £1,099 for the first year! (£1,291.33 inc VAT)
So , its a full £600 more than what the offer promised in the first place!
£499 Shareholder's Agreement indeed.
Legal firms who price like this also love to play games with how much they charge for other services such as company secretarial. Almost every other day I get a call from a customer who wants to bring their business back to us. Typically, they’ve left us because of an amazing deal another fixed price legal firm offered them for their company legal work. Then, after the first year, the remarkable price disappears and the customer ends up paying much more than what we were charging them in the first place. Some legal firms call this a “loss leader”, but it sounds more like “bait and switch” to me.
I’ve certainly heard the justifications about how this isn’t a scam, its just savvy marketing. After all, these unbelievable low prices all carry asterisks pointing to fine print.
My question to you is, do you want to do business with a law firm or company that forces you to read the fine print?