I just ran across Andy Havens' Legal Marketing weblog and this post about announcing price increases to clients.  Andy has a great blog, and I've added it to my list of daily reads.  Here are my favorite passages from his post:

One thing I will caution against, and that is the "spread the pain" message. I've heard of several firms that basically say, "We're gonna jack rates by 10%, but as a favor to you, we're going to do it slowly; 5% this year, and 5% next year." That's the most dumb-ass customer communications gaffe I've ever heard of. If you're going to screw somebody, do it and get it over with. Or do half now, and half again next year... but don't telegraph it ahead of time. It's like telling somebody, "I'm going to punch you in the mouth now... and then, in a second or two, I'm gonna punch you in the gut." No, no, no, no, no, no, no, no, no. Just don't do it.

PS: Better yet, switch to project-based billing. You'll make more money, you'll keep 10-15% more because of the time-value of money that ain't in the WIP for 6 months and your clients won't be worried that every time they call to ask a 10 second question that they'll be getting a bill for 1/10 of an hour.