Law Practice Management-- How To Identify Your Fees
When believing through their law firm marketing strategies, determining costs is a tough law practice management job for a lot of attorneys. In identifying charges for specific services, lawyers often disappoint what they should charge. When making their law company marketing strategies, too many attorneys are scared of even charging the competitive rate for their services. Even more, they make the pricing decisions often without any data or conceptual structure. Additionally, rather of focusing their efforts on how they can validate getting top dollar for what they offer, they charge a charge that is typically way too low and typically actually can frighten prospective clients who believe there is something missing from a service that is "cheap". In addition many lawyers do not realize that many buyers in the marketplace by far are "value purchasers" and not searching for " inexpensive".
Prior to you sit down and start believing through your law practice management rates technique you need some differences around pricing typically utilized in law company marketing preparation. Do understand a law practice management law company marketing strategy is not effective if you only draw in people who desire to pay the lowest fee for a service. Instead, you want to focus your law practice management and law firm marketing strategies on attracting clients who will become long term assets to the firm.
There are basically four ways 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 Rates
This is one excellent way of figuring out prices. Get your assistant to support you in this law practice management task and spend a long time finding what the range of pricing is in the neighborhood. Have her do a " secret buyer" study by calling around as if he/she were a potential client and discover what your rivals state on the phone to her around pricing. She might require to call from her home phone to avoid caller ID. As another choice you might have him/her call other assistants or paralegals at your rivals and provide to exchange your charges for their charges or you could do that with other lawyers yourself in your market. If you truly want to get into it and have optimal data you can write maybe a couple of dozen rivals in your market and say you are doing a fee survey and if they would send you their fee list you will produce a composite list that does not recognize those reacting and send them a copy of the outcomes. To keep it simple for them include a stamped, self-addressed envelope with a list of the most typical services offered in your practice area. Now you will see what people are charging for services similar to those you use. You ought to be able to come up with a series of prices. Utilize this variety to set prices for your own services. My suggestion in law office marketing preparation is to charge at the 75% level of the list. You must be at or in the leading 25% of the charges.
Remember that in general it is not a good law practice management method to complete on rate. Most potential clients will see pricing that is too low as a signal that there is something missing either from the service, the company, or the company.
The Expense Technique in Law Practice Management Prices
This law practice management rates technique is extremely simple really. The most common error in law practice management utilizing this approach is to neglect to consist of some form of your expenditure.
In law practice management often you count yourself out of the expenses and you need to include yourself in the costs. Typically you are doing at least some of the management work. If you are all three of these in one, you ought to consider one wage as due you for your time and expertise as the service technician explanation and supervisor as well as a profit of fifteen to thirty percent due you as the owner.
Fixed Rate Approach in Law Practice Management Prices
This is the technique utilized by lots of auto mechanics (it is called "the flat rate book") and other provider. This approach is where you figure out a fixed rate for different tasks and charge that rate no matter what. He makes more if the mechanic invests less time than allocated for the task. He makes less if he invests more time than designated. But in the end, all of it levels (well, typically to the mechanics' favor if you ask me). Another example utilizing this method is how managed healthcare has actually used this system with physicians and healthcare facilities . If they prefer, legal representatives can utilize this system.
The "Rule of 3" in Law Practice Management Pricing
This "rule of thumb" called the "rule 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 first 3rd we will take the total amount of salaries/bonuses (not benefits just salaries-- benefits go into the second 3rd coming next) for the revenue generators and/or timekeepers (this includes you if you are generating earnings) and call that our very first 3rd. What you require to do is take the overall amount (in this example $300,000) and now figure out how much you must charge per billable hour, per fixed rate or how numerous contingency fee cases won to be sure you struck the target we must strike offered our very first third number times 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 fair profit as well don't you agree? If this method is a bit too confusing do feel free to call me and I will help you arrange it out in a couple of minutes on the phone.
It is a great idea to think through all of these rates techniques in determining your law practice management rates technique before setting a rate and moving ahead with a law firm marketing strategy to guarantee you are thoroughly checking out all choices. In another article I will inform you how to speak to potential customers so you never have a issue getting the charge you deserve.