Law Practice Management-- How To Identify Your Fees
Determining charges is a tough law practice management task for most lawyers when thinking through their law company marketing strategies. In identifying fees for specific services, lawyers typically fall brief of what they must charge. Too many lawyers are afraid of even charging the competitive price for their services when making their law company marketing plans.
So prior to you sit down and start believing through your law practice management pricing strategy you require some differences around pricing frequently used in law office marketing planning. Then add your prices strategy to your law firm marketing plans. You need to be sure that you are charging a enough fee on whatever to ensure you a excellent revenue not just a good living. If you just bring in people who want to pay the lowest cost for a service, do know a law practice management law company marketing strategy is not reliable. These are not devoted customers. Instead, you wish to focus your law practice management and law office marketing plans on attracting clients who will become long term possessions to the firm. Low price clients are not developing your base of long term customers I can guarantee you that.
There are basically four methods of figuring out just how much you must be charging for your services. Lets move right into those now.
The Market Approach In Law Practice Management Pricing
Get your assistant to support you in this law practice management job and invest some time discovering what the range of pricing is in the neighborhood. To keep it easy for them include a stamped, self-addressed envelope with a list of the most common services provided in your practice area. My suggestion in law firm marketing preparation is to charge at the 75% level of the list.
Remember that in general it is not a great law practice management method to contend on rate. A lot of potential clients will see rates that is too low as a signal that there is something missing either from the service, the service provider, or the firm.
The Cost Method in Law Practice Management Pricing
This law practice management rates approach is extremely straightforward actually. The most common error in law practice management utilizing this approach is to disregard to include some form of your cost.
In law practice management typically you count yourself out of the costs and you need to include yourself in the expenditures. Often you are doing at least some of the management work. If you are all 3 of these in one, you ought to consider one wage as due you for your time and knowledge as the specialist and manager as well as a revenue of fifteen to thirty percent due you as the owner.
Fixed Rate Approach in Law Practice Management Prices
This is the technique utilized by many car mechanics (it is called "the flat rate book") and other service suppliers. This method is where you determine a set rate for numerous jobs and charge that rate no matter what. He makes more if the mechanic spends less time than allocated for the job. If he spends more time than designated, he makes less. However in the end, all of it evens out (well, normally to the mechanics' favor if you ask me). Another example using this method is how handled healthcare has utilized this system with medical professionals and medical facilities . Legal representatives can utilize this system if they prefer.
The " Guideline of 3" in Law Practice Management Rates
This " general rule" called the " guideline of 3" utilized in law practice management is not what your Certified Public Accountant may inform 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 very first third we will take the overall quantity of salaries/bonuses (not benefits simply salaries-- advantages enter into the second third coming next) for the income generators and/or timekeepers (this includes you if you are producing revenue) and call that our very first 3rd. Add up the incomes of the attorneys, paralegals, and legal secretaries who create earnings or are timekeepers see and call this your very first third (lets just say that number was $100,000 to keep it simple). Whatever that number is take that number again and it is your second third which we will call your "overhead" ( therefore that 2nd third is $100,000 and don't forget you if you are doing some managing partner type responsibilities since that part of your time goes here in overhead). Then take that very same number and we will call that your last third, which we will call gross earnings (another $100,000). What you require to do is take the overall amount (in this example $300,000) and now find out just hop over to these guys how much you should charge per billable hour, per repaired rate or see post how numerous contingency cost cases won to be sure you hit the target we must strike offered our first 3rd number times three (in this example $300,000).
This method shows you how much per hour you need to charge. If you are the owner of the practice you deserve a fair revenue as well don't you concur? If this technique is a bit too complicated do feel complimentary to call me and I will help you sort it out in a few minutes on the phone.
It is a good idea to think through all of these pricing techniques in identifying your law practice management rates strategy prior to setting a price and moving ahead with a law firm marketing strategy to ensure you are completely checking out all options. In another post I will inform you how to speak to prospective clients so you never have a issue getting the charge you deserve.