Law Practice Management-- How To Identify Your Fees
When believing through their law firm marketing plans, determining costs is a difficult law practice management task for many lawyers. In identifying costs for certain services, attorneys typically fall short of what they ought to charge. When making their law firm marketing strategies, too numerous lawyers are scared of even charging the competitive price for their services. Even more, they make the rates decisions typically with no information or conceptual structure. Furthermore, instead of focusing their efforts on how they can justify getting leading dollar for what they offer, they charge a fee that is often way too low and often in fact can frighten potential customers who think there is something missing out on from a service that is " inexpensive". In addition lots of attorneys do not realize that a lot of buyers in the marketplace without a doubt are " worth purchasers" and not trying to find " inexpensive".
Prior to you sit down and begin thinking through your law practice management pricing strategy you require some differences around pricing commonly used in law company marketing planning. Do know a law practice management law firm marketing strategy is not efficient if you just bring in people who want to pay the lowest charge for a service. Instead, you desire to focus your law practice management and law company marketing plans on drawing in customers who will become long term properties to the firm.
There are basically four methods of identifying just how much you should be charging for your services. Lets move right into those now.
The Marketplace Method In Law Practice Management Rates
This is one great method of identifying pricing. Get your assistant to support you in this law practice management job and invest some time finding what the series of prices remains in the community. Have her do a "mystery consumer" study by calling around as if he/she were a possible customer and find out what your competitors say on the phone to her around rates. She may require to call from her home phone to prevent caller ID. As another option you could have him/her call other assistants or paralegals at your competitors and use to exchange your costs for their fees or you could do that with other attorneys yourself in your market. If you really want to get into it and have maximum data you can write maybe a couple of dozen competitors in your market and state you are doing a fee survey 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 easy for them consist of a stamped, self-addressed envelope with a list of the most typical services used in your practice area. Now you will see what people are charging for services similar to those you offer. You must be able to come up with a series of prices. Use this range to set costs for your own services. My suggestion in law firm marketing planning is to charge at the 75% level of the list. You must be at or in the leading 25% of the charges.
Keep in mind that in basic it is not a great law practice management method to complete on price. Many possible clients will see prices that is too low as a signal that there is something missing either from the service, the service provider, or the company.
The Expense Technique in Law Practice Management Prices
This law practice management rates approach is really straightforward really. One simply determines what the expenses are to provide service or products and includes on a sensible profit, somewhere in between fifteen percent at the least and maybe thirty three percent at the most. The most common mistake in law practice management utilizing this technique is to overlook to include some form of your expense. Solo and little firm attorneys tend to not include their own salary!
In law practice management often you count yourself out of the expenditures and you ought to include yourself in the expenditures. Often you are doing at least some of the why not find out more management work. If you are all three of these in one, you need to think about one salary as due you for your time and competence as the professional and manager as well as a profit of fifteen to thirty percent due you as the owner.
Fixed Rate Technique in Law Practice Management Rates
This is the method used by numerous auto mechanics (it is called "the flat rate book") and other service suppliers. This approach is where you determine a set rate for various jobs and charge that rate no matter what. If the mechanic spends less time than allotted for the task, he makes more. If he invests more time than designated, he earns less. In the end, it all evens out (well, normally to the mechanics' favor if you ask me). Another example utilizing this technique is how handled healthcare has utilized this system with medical professionals and medical facilities . If they want, legal representatives can use this system.
The "Rule of Three" in Law Practice Management Prices
This " guideline" called the "rule of 3" used in law practice management is not what your CPA might inform you and it does not fail you either. Ask your CPA what they think about 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 amount of salaries/bonuses (not benefits just wages-- benefits go into the second 3rd following) for the revenue generators and/or timekeepers (this includes you if you are generating revenue) and call that our first third. Include up anonymous the salaries of the legal representatives, paralegals, and legal secretaries who generate earnings or are timekeepers and call this your first 3rd (lets simply say that number was $100,000 to keep it simple). Whatever that number is take that number again and it is your second 3rd which we will call your "overhead" (thus that second third is $100,000 and don't forget you if you are doing some managing Our site partner type tasks since that part of your time goes here in overhead). Then take that exact same number and we will call that your last third, which we will call gross earnings (another $100,000). What you need to do is take the overall quantity (in this example $300,000) and now figure out just how much you need to charge per billable hour, per repaired rate or how lots of contingency charge cases won to be sure you hit 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 should have a reasonable profit as well don't you concur? If this method is a bit too complicated do feel free to contact me and I will help you arrange it out in a couple of minutes on the phone.
It is a good concept to think through all of these pricing approaches in identifying your law practice management prices technique before setting a cost and moving ahead with a law firm marketing strategy to ensure you are thoroughly checking out all choices. In another short article I will tell you how to speak to potential customers so you never have a problem getting the cost you deserve.