Law Practice Management-- How To Identify Your Fees
Figuring out fees is a challenging law practice management job for many lawyers when thinking through their law firm marketing strategies. In determining charges for specific services, attorneys typically fall brief of what they ought to charge. Too many lawyers are scared of even charging the competitive cost for their services when making their law firm marketing plans.
Before you sit down and start believing through your law practice management pricing technique you require some differences around prices frequently utilized in law company marketing planning. Include your rates technique to your law company marketing strategies. You need to be sure that you are charging a adequate cost on whatever to ensure you a excellent earnings not simply a great living. If you just attract people who desire to pay the least expensive cost for a service, do understand a law practice management law firm marketing plan is not reliable. These are not faithful clients. Instead, you wish to focus your law practice management and law office marketing intend on drawing in clients who will end up being long term properties to the firm. Low price customers are not constructing your base of long term customers I can promise you that.
There are essentially four methods of identifying just how much you should be charging for your services. Lets move right into those now.
The Market Approach In Law Practice Management Prices
This is one excellent way of figuring out pricing. Get your assistant to support you in this law practice management task and spend a long time finding what the series of pricing is in the community. Have her do a "mystery shopper" study by calling around as if he/she were a possible customer and discover what your competitors say on the phone to her around pricing. She might need to call from her home phone to prevent caller ID. As another alternative you might have him/her call other assistants or paralegals at your competitors and offer to exchange your fees for their charges or you might do that with other attorneys yourself in your market. If you really desire to enter it and have optimal data you can write maybe a few dozen rivals in your marketplace and state you are doing a charge study and if they would send you their charge list you will develop a composite list that does not recognize those responding and send them a copy of the results. To keep it basic for them consist of a stamped, self-addressed envelope with a list of the most common services offered in your practice area. Now you will see what individuals are charging for services similar to those you use. You need to have the ability to develop a range of prices. Utilize this range to set costs for your own services. My recommendation in law office marketing planning is to charge at the 75% level of the list. So you should be at or in the top 25% of the fees.
Remember that in general it is not a good law practice management strategy to compete on rate. Most possible clients will see rates that is too low as a signal that there is something missing either from the service, the provider, or the firm.
The Expense Method in Law Practice Management Prices
This law practice management prices technique is really uncomplicated truly. The most typical mistake in law practice management using this approach is to neglect to consist of some form of your cost.
In law practice management often you count yourself out of the expenditures and you need to include yourself in the expenditures. Frequently you are doing at least some of the management work. If you are all 3 of these in one, you must think about one salary as due you for your time and knowledge as the professional and manager as well as a profit of fifteen to thirty percent due you as the owner.
Fixed Rate Method in Law Practice Management Pricing
This is the technique utilized by numerous auto mechanics (it is called "the flat rate book") and other service providers. This method is where you figure out a set rate for different jobs and charge that rate no matter what. Another example utilizing this technique is how managed health care has utilized this system with medical professionals and healthcare facilities .
The " Guideline of Three" in Law Practice Management Rates
This " general rule" called the " guideline of three" utilized in law practice management is not what your Certified Public Accountant may tell you and it does not fail you either. Ask your Certified Public Accountant what they consider it and they will like it. To start we are going to be thinking in thirds. For the first 3rd we will take the overall quantity of salaries/bonuses (not benefits just salaries-- benefits go into the second 3rd following) for the earnings generators and/or timekeepers (this includes you if you are generating earnings) and call that our very first third. Include up the salaries of the attorneys, paralegals, and legal secretaries who produce profits or are timekeepers and call this your very first third (lets just state that number was $100,000 to keep it basic). Whatever that number is take that number again and it is your 2nd third which we will call your "overhead" ( hence that second 3rd is $100,000 and do not forget you if you are doing some managing partner type responsibilities because that part of your time goes here in overhead). Then take that exact same number and we will call that your last 3rd, which we will call gross earnings (another $100,000). What you need to do is take the total quantity (in this example $300,000) and now figure out how much you must charge per billable hour, per fixed rate or the number of contingency cost cases won to be sure you struck the target we need to hit offered our first 3rd number times i loved this 3 (in this example $300,000).
This method reveals you how much per hour you require to charge. If you are the owner of the practice you deserve a reasonable profit as well don't you concur? If this approach is a bit too confusing do feel complimentary to call me and I will help you arrange it out in a couple of minutes on the phone.
It is a good idea to think through all of these pricing techniques in determining your law practice management prices technique before setting a price and moving ahead with a law firm marketing plan to ensure you are completely checking out all alternatives. In another post I will inform you how to speak to possible customers so you never ever have a problem getting the fee you deserve.