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In the home garden, pruning is usually done in the late spring, once you can see your lavender showing new growth.
The reason you have to wait to see the new growth, is that lavender can look dead, when in fact it is not.
You do not usually prune a plant you have just planted.
The second year it is in the garden, I would remove dead branched and shape the plant.
From the third year on:
Step 1. Remove any dead branches.
Step 2. Cut the plant back about 1/3 of its size - both the top and sides
Step 3. Shape the plant.
After blooming or if you are harvesting the flowers, remove the flower stalks and an inch or two of the growth below the stalk. That will encourage more growth.
What to do with a woody plant
First - I have friends who love the look of woody lavender. The problem in my climate is these branches are prone to damage from the weight of the snow on them. The best thing is to prevent your lavender developing woody branches with proper pruning.
Lavender is an amazing plant because sometimes the woody growth will put out new shoots, but not always. If you simply cut off the woody branches, you risk killing the plant.
Ellen Spector Platt, in her book Lavender, How to Grow and Use the Fragrant Herb, suggests making a 3 year plan. "In spring when the first new growth is evident, cut about one-third of the stems back to within a few inches of where the woody part starts. Trim the rest of the stems back about one-third of the way. For the next two years, cut another third of the stems back near the wood and just trim all the remaining stems. In this way, you will prune the whole plant in three years without causing too drastic a shock to its system."