What is a rate increase?

A rate increase raises the prices a firm charges for its services. Rate increases can apply across the board, to specific services, or to individual clients. Regular rate increases are necessary to maintain margins as costs rise and to capture additional value as expertise grows. Most professional service firms should increase rates annually.

Timing and communication

Announce increases 30 to 60 days before they take effect. Frame the increase around value delivered, not your cost pressures. Clients understand that costs rise over time. Lead with continued commitment to quality and results. Avoid apologetic language that undermines the rationale. A confident, straightforward communication works best.

Handling pushback

Some clients will push back. Be prepared with data on market rates and value delivered. Consider grandfathering existing engagements through completion while applying new rates to future work. Identify clients who will never accept increases and decide if retaining them at old rates makes strategic sense. Some attrition after increases is normal and often healthy.