Law Practice Management-- How To Identify Your Fees
Figuring out fees is a tough law practice management task for the majority of attorneys when thinking through their law company marketing plans. In determining fees for particular services, lawyers typically fall short of what they need to charge. Too lots of attorneys are scared of even charging the competitive cost for their services when making their law firm marketing plans.
Prior to you sit down and begin believing through your law practice management pricing method you need some distinctions around prices frequently used in law firm marketing preparation. Do know a law practice management law company marketing plan is not efficient if you only draw in individuals who want to pay the most affordable charge for a service. Instead, you desire to focus your law practice management and law firm marketing strategies on bring in customers who will become long term properties to the firm.
There are generally 4 methods of determining just how much you need to be charging for your services. Lets move right into those now.
The Marketplace Approach In Law Practice Management Prices
This is one great way of determining rates. Get your assistant to support you in this law practice management task and spend some time finding what the variety of rates is in the neighborhood. Have her do a " secret buyer" research study by calling around as if he/she were a potential client and discover what your rivals state on the phone to her around rates. She might need to call from her home phone to prevent caller ID. As another option you might have him/her call other assistants or paralegals at your competitors and offer to exchange your fees for their charges or you could do that with other attorneys yourself in your market. If you truly want to get into it and have optimal information you can compose possibly a few dozen competitors in your marketplace and state you are doing a fee study and if they would send you their charge list you will create a composite list that does not identify those responding and send them a copy of the results. To keep it easy for them consist of a stamped, self-addressed envelope with a list of the most typical services provided in your practice location. Now you will see what people are charging for services comparable to those you offer. You need to be able to come up with a series of rates. Use this range to set rates for your own services. My recommendation in law practice marketing preparation is to charge at the 75% level of the list. So you must be at or in the top 25% of the costs.
Keep in mind that in basic it is not a great law practice management strategy to compete on rate. Most possible clients will see prices that is too low as a signal that there is something missing either from the service, the supplier, or the company.
The Expense Approach in Law Practice Management Rates
This law practice management pricing approach is really straightforward truly. The most typical mistake in law practice management using this technique is to overlook to include some type of your expense.
In law practice management often you count yourself out of the costs and you must include yourself in the expenses. Frequently you are doing at least some of the management work. If you are all three of these in one, you should think about one wage as due you for your time and proficiency as the professional and supervisor as well as a revenue of fifteen to thirty weblink percent due you as the owner.
Fixed Rate Approach in Law Practice Management Rates
This is the approach used by lots of car mechanics (it is called "the flat rate book") and other company. This method is where you determine a set rate for various tasks and charge that rate no matter what. If the mechanic invests less time than set aside for the task, he makes more. If he spends more time than allotted, he makes less. However in the end, all of it levels (well, generally to the mechanics' favor if you ask me). Another example using this method is how managed health care has used this system with medical professionals and hospitals . Lawyers can utilize this system if they want.
The "Rule of Three" in Law Practice Management Prices
This " guideline of thumb" called the " guideline of three" utilized in law practice management is not what your Certified Public Accountant might tell you and it does not fail you either. For the very first third we will take the overall quantity of salaries/bonuses (not advantages just salaries-- advantages go into the second third coming next) for the profits generators and/or timekeepers (this includes you if you are producing earnings) and call that our very first third. What you need to do is take the overall quantity (in this example $300,000) and now figure out how much you need to charge per billable hour, per repaired rate or how lots of contingency charge cases won to be sure you struck the target we should hit offered our very first third number times three (in this example $300,000).
This approach reveals you how much per hour you need to charge. If you are the owner of the practice you are worthy of a fair profit as well don't you concur? If this approach is a bit too confusing do feel free to contact me and I will assist you sort it out in a couple of minutes on the phone.
It is a excellent idea to think through all of these pricing methods in determining your law practice management rates technique prior to setting a rate and moving ahead with a law office marketing strategy to guarantee you are thoroughly checking out all choices. Remember the propensity for most legal representatives is to price too low. Do not do that! In another article I will inform you how to speak with potential clients so you never have a problem getting the charge you deserve.