Grandfathering Clients vs. Transitioning Everyone to the New Rate

Among the most common decisions practitioners face when raising rates is whether to grandfather any existing clients at the old rate. The grandfathering question comes up in almost every rate increase, and there is rarely a universal right answer — but there are real tradeoffs worth understanding before the policy is decided.

What nobody explains about grandfathering decisions is that grandfathering is not just a financial arrangement — it is a communication about how the practitioner values the relationship and what the rate change means for continuity of care.

What Full Transition Looks Like

A full transition — where every client, regardless of tenure, moves to the new rate on the effective date — is the cleanest approach in terms of consistency and simplicity. There is no two-tier system to manage, no ongoing tracking of who is on the old rate, and no implicit communication that the old rate is available if the relationship is long enough.

When full transition is appropriate:
– The rate increase reflects a significant repositioning, not just an incremental adjustment
– The practitioner wants to hold the rate consistently without the complexity of multiple tiers
– The current rate is far enough below warranted that sustaining any clients at the old rate would maintain a financial arrangement that is itself unsustainable

Deciding the policy before the announcement: the communication that accompanies a full transition needs appropriate lead time. Thirty to sixty days’ notice is typically appropriate for existing clients, giving them time to plan and decide whether to continue.

The risk of full transition:
Some long-tenure clients — those who have been in the practice for years and have contributed significantly to its stability — may experience a full transition as abrupt, particularly if they have never received any previous rate increase. How long-term clients factor into this decision: a longer transition window (rather than grandfathering at the old rate indefinitely) can honor the relationship without creating a permanent two-tier system.

What Grandfathering Looks Like

Grandfathering — maintaining some clients at the old rate for a defined period or permanently — can be a genuine expression of relationship value, particularly for long-tenure clients whose consistency has supported the practice through its development.

When grandfathering is appropriate:
– A small number of specific clients have a genuinely distinctive relationship to the practice — tenure, contribution, or other factors that make the exception genuinely meaningful
– The grandfathering has a defined end date or condition, not an indefinite continuation
– The policy was decided in advance, not arrived at reactively in individual conversations

What happens when grandfathering becomes ad hoc: the most common problem with grandfathering is when it is not a policy but a pattern — where each exception is made individually, based on how a particular conversation feels. Ad hoc grandfathering produces inconsistency, and inconsistency produces a rate that is held in name only.

The risk of grandfathering:
A large number of grandfathered clients significantly dilutes the financial impact of the rate increase. If the rate increase is financially necessary, grandfathering too many clients delays the resolution. It also creates a two-tier system that can become awkward to explain or maintain over time.

The Most Common Middle Path

Many practitioners find the most workable approach is a full transition with a defined transition period — all existing clients move to the new rate, but with a specific number of sessions or months at the old rate before the transition takes effect. This honors the relationship with tenure without creating a permanent two-tier system.

How to communicate whichever decision is made: the communication quality matters more than the specific policy. A clearly communicated full transition is received better than a poorly communicated grandfathering arrangement.

The right choice depends on the specific practice, the specific clients, and the specific financial situation. What makes either choice work is that it was decided deliberately, in advance, and communicated clearly.

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