Law Practice Management-- How To Determine Your Charges
Figuring out fees is a tough law practice management job for most attorneys when believing through their law firm marketing plans. In identifying fees for particular services, lawyers often fall short of what they ought to charge. Too numerous attorneys are afraid of even charging the competitive price for their services when making their law company marketing plans.
Prior to you sit down and begin thinking through your law practice management pricing strategy you require some differences around prices frequently utilized in law company marketing planning. Then add your pricing method to your law office marketing plans. You require to be sure that you are charging a adequate charge on everything to guarantee you a great earnings not just a excellent living. Do know a law practice management law firm marketing plan is not efficient if you just attract people who desire to pay the most affordable fee for a service. These are not faithful customers. Instead, you wish to focus your law practice management and law office marketing strategies on bring in clients who will become long term assets to the company. Low cost clients are not building your base of long term clients I can promise you that.
There are essentially 4 ways of identifying just how much you must be charging for your services. Lets move right into those now.
The Market Technique In Law Practice Management Rates
This is one excellent method of identifying prices. Get your assistant to support you in this law practice management task and invest a long time discovering what the variety of rates is in the community. Have her do a "mystery shopper" study by calling around as if he/she were a possible customer and learn what your rivals say on the phone to her around pricing. She might require to call from her home phone to prevent caller ID. As another alternative you could have him/her call other assistants or paralegals at your rivals and use to exchange your fees for their charges or you could do that with other lawyers yourself in your market. If you really wish to get into it and have optimal information you can compose maybe a few lots rivals in your marketplace and state you are doing a cost survey and if they would send you their fee list you will produce a composite list that does not determine 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 offered in your practice location. Now you will see what people are charging for services similar to those you offer. You need to have the ability to develop a variety of rates. 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 ought to be at or in the top 25% of the costs.
Keep in mind that in basic it is not a excellent law practice management strategy to complete on price. A lot of prospective clients will see prices that is too low as a signal that there is something missing out on either from the service, the company, or the firm.
The Cost Method in Law Practice Management Rates
This law practice management rates technique is very simple actually. The most typical mistake in law practice management utilizing this approach is to overlook to include some kind of your expenditure.
In law practice management typically you count yourself out of the expenses 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 ought to think about one income as due you for your time and proficiency as the specialist and manager as well as a earnings of fifteen to thirty percent due you as the owner.
Fixed Rate Technique in Law Practice Management Rates
This is the method utilized by lots of auto mechanics (it is called "the flat rate book") and other service companies. This approach is where you identify a fixed rate for numerous tasks and charge that rate no matter what. Another example using this technique is how managed health care has actually used this system with medical facilities and doctors .
The " Guideline of 3" in Law Practice Management Rates
This "rule of thumb" called the " guideline of three" used in law practice management is not what your CPA may tell you and it does not fail you either. For the very first third we will take the overall amount of salaries/bonuses (not advantages just wages-- benefits go into the 2nd third more information coming next) for the earnings generators and/or timekeepers (this includes you if you are producing revenue) and call that our very first third. What you need to do is take the total amount (in this example $300,000) and now figure out how much you need to charge per billable hour, per fixed rate or how many contingency charge cases won to be sure you struck the target we should strike offered our very first third number times three (in this example $300,000).
This technique shows you how much per hour you need to charge. If you are the owner of the practice you deserve a reasonable earnings as well do not you agree? If this method is a bit too complicated do feel free to contact me and I will assist you sort it out in a few minutes on the phone.
It is a excellent concept to think through all of these prices approaches in identifying your law practice management rates method before setting a rate and continuing with a law office marketing plan to guarantee you are completely exploring all choices. Remember the tendency for a lot of lawyers is to price too low. Do not do that! In another post I will inform you how to speak to potential clients so you never have a problem getting the charge you are worthy of.