Identifying fees is a difficult law practice management task for most attorneys when thinking through their law firm marketing strategies. In determining fees for specific services, attorneys often fall short of what they should charge. Too lots of attorneys are scared of even charging the competitive price for their services when making their law company marketing plans.
Before you sit down and start thinking through your law practice management prices strategy you need some distinctions around pricing commonly used in law company marketing preparation. Do know a law practice management law firm marketing plan is not effective if you only bring in individuals who desire to pay the most affordable cost for a service. Instead, you want to focus your law practice management and law firm marketing strategies on attracting clients who will end up being long term possessions to the firm.
There are generally four ways of determining how much you ought to be charging for your services. Lets move right into those now.
The Market Technique In Law Practice Management Pricing
This is one great way of determining prices. Get your assistant to support you in this law practice management task and spend some time discovering what the series of prices is in the neighborhood. Have her do a "mystery buyer" research study by calling around as if he/she were a prospective client and find out what your competitors say on the phone to her around rates. She might need to call from her home phone to prevent caller ID. As another alternative you might have him/her call other assistants or paralegals at your rivals and use to exchange your fees for their fees or you might do that with other lawyers yourself in your market. If you actually desire to get into it and have maximum data you can compose perhaps a couple of dozen rivals in your market and say you are doing a fee study and if they would send you their charge list you will develop a composite list that does not identify those reacting and send them a copy of the results. To keep it simple for them consist of a stamped, self-addressed envelope with a list of the most common services offered in your practice location. Now you will see what people are charging for services comparable to those you offer. You should have the ability to come up with a variety of rates. Utilize this range to set costs for your own services. My suggestion in law office marketing planning is to charge at the 75% level of the list. So you should be at or in the leading 25% of the fees.
Keep in mind that in basic it is not a great law practice management technique to complete on cost. The majority 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 provider, or the company.
The Expense Technique in Law Practice Management Rates
This law practice management prices approach is very simple truly. The most common error in law practice management using this method is to neglect to consist of some form of your expense.
In law practice management typically you count yourself out of the costs and you must 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 must advice think about one wage as due you for your time and know-how as the professional and manager as well as a profit of fifteen to thirty percent due you as the owner.
Fixed Rate Method in Law Practice Management Prices
This is the method utilized by numerous auto mechanics (it is called "the flat rate book") and other service providers. This approach is where you identify a set rate for different jobs and charge that rate no matter what. Another example utilizing this technique is how managed health care has actually used this system with doctors and health centers .
The "Rule of Three" in Law Practice Management Prices
This "rule of thumb" called the "rule of 3" utilized in law practice management is not what your Certified Public Accountant may inform you and it does not fail you either. For the very first 3rd we will take the overall quantity of salaries/bonuses (not advantages simply incomes-- benefits go into the second third coming next) for the revenue generators and/or timekeepers (this includes you if you are generating income) and call that our first third. What you need to do is take the overall quantity (in this example $300,000) and now figure out how much you should charge per billable hour, per fixed rate or how many contingency fee cases won to be sure you struck the target we should hit given our very first 3rd number times 3 (in this example $300,000).
This approach shows you just how much per hour you require to charge. Considering that you know the number of billable hours each profits generator can do per month, simply divide that into your overall of all thirds ($300,000) to see what you need to charge per billable hour to make your numbers come out correctly. As long as you hit your targets you will be guaranteed of a 15% to 30% net revenue from your operations. After all if you are the owner of the practice you should have a reasonable profit too don't you concur? This method is called the Guideline of Three. If this method is a bit too complicated do do not hesitate to call me and I will help you arrange it out in a few minutes on the phone.
It is a good idea to think through all of these rates techniques in determining your law practice management rates strategy prior to setting a cost and moving ahead with a law firm marketing plan to ensure you are thoroughly checking out all choices. In another article I will inform you how to speak to possible clients so you never have a problem getting the fee you are worthy of.