ABA Journal

The New Normal

‘Satisfaction guaranteed’—it’s never caught on with lawyers

By Patrick J. Lamb

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The other night I was listening to Terry O’Reilly’s Under the Influence podcast as I drove home. The episode, titled “Satisfaction Guaranteed,” focused on “companies that offer 100 percent, no questions-asked, no fine print, lifetime guarantees.”

Valorem Law Group has always offered our clients the unqualified right to adjust the amount of their bill (even to $0) to reflect their judgment of the value we have provided them, a practice we “borrowed” (with permission) from our friends at Summit Law Group. Recently, our friends at Conduit Law “borrowed” (with permission) the idea from us. Three law firms offering satisfaction guarantees by turning pricing over to their clients. That is not a lot. I have always wondered why more firms did not take advantage of this great client relationship tool, so I listened to the “Satisfaction Guaranteed” podcast with interest.

O’Reilly, an award-winning advertiser, found just a handful of companies who over the unconditional satisfaction guarantees. He starts with venerable L.L.Bean. Its guaranty states simply:


“Our products are guaranteed to give 100 percent satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We do not want you to have anything from L.L.Bean that is not completely satisfactory.”

L.L.Bean has had a 100% satisfaction guaranty since Leon Leonwood Bean sold his first product in 1911. I have purchased many items from L.L.Bean over the years. On two occasions that I recalled, I returned items that were several years old because the product deteriorated faster than I believed it should have. In both circumstances, Bean accepted the returns and its people seemed happy to do so. It is one reason I still buy products from them.

Another company O’Reilly features is Darn Tough Vermont. Its guaranty states:

Our Lifetime Guarantee

Unconditional lifetime guarantee—simply and without strings or conditions:

“If our socks are not the most comfortable, durable and best fitting socks you have ever owned, return them for another pair, or your money back.

“No strings. No conditions. For life.

“When you are really serious about something you make it yourself.”

Darn Tough Vermont started making private label socks 36 years ago but faced a crisis when its customers started shifting production overseas. Darn Tough Vermont decided to go it alone and make a sock better than that made by any other company. Their sock, Darn Tough Vermont, contains a remarkable 1,441 stitches per square inch. A telling sign hangs in their mill—“Nobody ever outsourced anything for quality.”

The Darn Tough Vermont sign reminds its workers about something everyone who offers customers a right to return products or adjust prices for services thinks about a great deal—quality. If quality suffers, customers will adjust prices on that invoice and may well not give you a chance on another matter. Satisfaction guarantees have the effect of putting quality at top of mind every single day.

Another example is Lands’ End. Its guaranty reads:

Guaranteed. Period.®

We want nothing less than your absolute satisfaction

“The Lands’ End guarantee has always been an unconditional one. It reads: ‘If you’re not satisfied with any item, simply return it to us at any time for an exchange or refund of its purchase price.’ We mean every word of it. Whatever. Whenever. Always. But to make sure this is perfectly clear, we’ve decided to simplify it further: Guaranteed. Period.®”

But when you offer guarantees like this, you have to live with it. O’Reilly recounts the story of the London cab that was offered for sale in 1984 as part of catalog promotion. The wife of a car collector bought it for $19,000. The woman sought to return the car in 2005. Lands’ End never thought twice about providing the full refund.

O’Reilly identifies several other companies that offer similar satisfaction guarantees. He also uses one example of a company that used to provide such a guaranty, but then abandoned it. REI, the outdoor equipment company, used to provide an unconditional guaranty, but people started to purchase REI items on eBay or garage sales and then return them for full price. The company finally gave up.

People say that the Value Adjustment Line is not for the faint of heart. They say it requires superb work, pricing that is consistent with the value you are providing, and a great deal of trust in your client. All of this is true, but isn’t that what most lawyers strive for every day anyway? Perhaps other than learning to price by value from the client’s perspective rather than simply time, lawyers strive for great work product. And every lawyer wants to earn every client’s trust. We want our clients to believe that we are committed to providing exceptional quality: we ask them to trust us. But trust is a two-way street. The Value Adjustment Line is one important way we show our clients that we trust them. Few firms are willing to put their fee in their client’s hands.

The Value Adjustment Line does establish trust. In practice, it is rarely used. While I am not aware of any data comparing the frequency of use of the VAL compared to clients calling firms about hourly based invoices, my guess is that it is much less. If, as is generally believed to be so, most firms accommodate their clients’ demands for adjustments to invoices (realization rates are reported to be about 85 percent, after all), firms are making the adjustments without gaining any of the benefits of the VAL. One client told me that he always thought that firms that didn’t offer the VAL didn’t really trust or didn’t believe in the value of their work. Either way, if that sentiment is widely shared among clients, firms are missing out on a valuable opportunity to improve their client relationships.

Patrick Lamb is a founding member of Valorem Law Group, a litigation firm representing business interests. Valorem helps clients solve their business disputes and cope with pressures to reduce legal spend using nontraditional approaches, including use of nonhourly fee structures, coordination with LPOs or contract lawyers, joint-venturing with other firms and implementation of project management tools to handle lawsuits or portfolios of litigation.

Pat is the author of the books Alternative Fee Arrangements: Value Fees and the Changing Legal Market and Alternative Fees for Litigators and Their Clients. He also blogs at In Search Of Perfect Client Service.

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