Apple just announced that it’s cutting the price of the 8gb iPhone and discontinuing the 4gb iPhone.  Of course, this has the people who bought the iPhone already upset and the people who have yet to buy the iPhone happy.  What’s also interesting about this is that it’s basically the reverse of the standard “introductory rate” package.  Normally, when someone is entering into a contract or buying consumer goods, any discount is upfront — think of Columbia House DVDs — get so many for $1 and then buy a bunch for $20.  In this case, it’s the opposite — pay so much for it now,  pay less if you wait and get it later.

Yes I know that prices for electronics eventually fall.  But this is different simply because of (a) the timing [the phone only came a couple months ago]; (b) market demand hasn’t slowed down; and (c) there isn’t a new “replacement” technology.

So what can you, the lawyer, learn from the drop in the price of the iPhone?  Take a look at your rates — probably not everyone in your target market can afford your rates as is.

Perhaps you’ve been practicing for a long-time and have slowly increased your rates over that time.  Your long-term clients have seen the rates climb slowly and steadily and have been able to adapt to the growing costs.  New clients may not be in a position to do this.  Frankly, there’s nothing wrong with having different rates for different clients.  While a large number of iPhones have already sold, there’s a large portion of the market that simply cannot spend $600 on a cell phone.  Those who can and are willing to probably already bought the iPhone if they wanted it.  Those that can’t may be able to buy it now that the price went down.

I’m not saying that you should always charge new clients less for the same work — it’s not fair to you and it’s not necessarily good business.  However, you should look into different aspects — if you do corporate law, you may want to charge small start-ups a little less for some of the upfront/initial work (articles of incorporation, etc…) and develop them into long-term clients.  A few years down the line they may be in a better place and able to pay some of your higher fees.  A young couple without a family may only need the most basic of wills — charging a little less when they get them may lead them back to you as their assets and family grow, creating the need for more complicated wills and trusts done at higher costs.

If you have a sufficient client/work load as is, then you don’t need to consider this.  If you’ve been thinking of ways to bring in new long-term clients to replace ones that may no longer need your services (i.e., businesses that have been sold, clients who have moved or passed away), then you may want to target them at their inception, at a rate they mind easier to swallow.

After all, if Apple needs to drop the price of the iPhone to reach more of their target market, perhaps you do too.