When thinking through their law company marketing strategies, determining charges is a tough law practice management job for a lot of attorneys. In determining fees for certain services, lawyers typically fall short of what they ought to charge. A lot of attorneys hesitate of even charging the competitive price for their services when making their law practice marketing strategies. Further, they make the rates choices often with no data or conceptual framework. Additionally, instead of focusing their efforts on how they can justify getting top dollar for what they offer, they charge a fee that is typically way too low and typically in fact can scare off prospective clients who think there is something missing from a service that is "cheap". Additionally numerous attorneys don't understand that a lot of purchasers in the market by far are "value purchasers" and not searching for "cheap".
Prior to you sit down and begin thinking through your law practice management rates technique you need some distinctions around prices commonly utilized in law firm marketing preparation. Do know a law practice management law company marketing strategy is not efficient if you just draw in people who desire to pay the lowest cost for a service. Instead, you desire to focus your law practice management and law company marketing strategies on bring in customers who will become long term possessions to the company.
There are basically 4 methods of determining 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 excellent way of determining prices. Get your assistant to support you in this law practice management job and spend a long time finding what the series of rates remains in the community. Have her do a " secret buyer" study by calling around as if he/she were a prospective customer and find out what your rivals say on the phone to her around rates. She may need to call from her house phone to prevent caller ID. As another option you could have him/her call other assistants or paralegals at your rivals and use to exchange your fees for their charges or you might do that with other legal representatives yourself in your market. If you really wish to enter it and have optimal data you can write perhaps a couple of dozen rivals in your marketplace and say you are doing a cost 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 outcomes. To keep it basic for them consist of a stamped, self-addressed envelope with a list of the most common services used in your practice location. Now you will see what people are charging for services comparable to those you provide. You ought to have the ability to create a variety of costs. Utilize this variety to set prices for your own services. My suggestion in law practice marketing planning is to charge at the 75% level of the list. So special info you ought to be at or in the top 25% of the charges.
Remember that in basic it is not a great law practice management strategy to complete on cost. The majority of possible customers will see prices that is too low as a signal that there is something missing out on either from the service, the supplier, or the firm.
The Cost Technique in Law Practice Management Rates
This law practice management rates method is really simple really. One just determines what the expenses are to deliver services or products and includes on a reasonable revenue, someplace in between fifteen percent at the least and possibly thirty three percent at the most. The most common mistake in law practice management utilizing this method is to disregard to include some type of your expenditure. Solo and small company lawyers tend to not include their own income!
In law practice management often you count yourself out of the expenditures and you must include yourself in the expenditures. Typically 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 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 numerous vehicle mechanics (it is called "the flat rate book") and other service companies. This method is where you figure out a fixed rate for various jobs and charge that rate no matter what. Another example using this method is how managed health care has used this system with hospitals and medical professionals .
The " Guideline of 3" in Law Practice Management Rates
This " guideline 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 first 3rd we will take the total quantity of salaries/bonuses (not advantages simply wages-- advantages go into the second 3rd coming next) for the profits generators and/or timekeepers (this includes you if you are producing earnings) and call that our first third. What you need to do is take the total quantity (in this example $300,000) and now figure out how much you should charge per billable hour, per repaired rate or how many contingency charge cases won to be sure you struck the target we must strike offered our very first 3rd number times 3 (in this example $300,000).
This approach shows you how much per hour you require to charge. If you are the owner of the practice you should have a reasonable revenue as well do not you concur? If this approach is a bit too complicated do feel totally free to call me and I will help you sort it out in a couple of minutes on the phone.
It is a good idea to believe through all of these rates methods in determining your law practice management prices technique prior to setting a rate and moving ahead with a law practice marketing strategy to ensure you are completely checking out all choices. Remember the propensity for a lot of attorneys is to price too low. Do not do that! In another article I will tell you how to speak to prospective customers so you never have a problem getting the cost you should have.