Most of you reading will probably be familiar with the phrase “price discrimination“. It refers to the practice of charging different amounts to different people for the same product or service. Effectively, you are charged based on your ability to pay, not on what you receive in return.
We came across an interesting example of price discrimination recently when talking to some solicitors. They listed a set of criteria which they use as the basis of calculating what they charge their clients. These included:
- The value of the item / deal / property involved
- How important the matter is to the client
- The rarity of the questions raised
So, for instance, two people getting exactly the same advice about a property deal can be charged different amounts depending on the value of each of the deals, and a company can be charged more depending on “how important” a matter is to it, or how often the question comes up!
Is it any wonder the legal profession is under scrutiny for its pricing practices?
