Identifying costs is a difficult law practice management task for a lot of lawyers when thinking through their law firm marketing strategies. In figuring out costs for certain services, attorneys typically fall short of what they should charge. Too numerous attorneys are afraid of even charging the competitive cost for their services when making their law company marketing plans.
Before you sit down and start thinking through your law practice management pricing strategy you require some differences around pricing typically utilized in law firm marketing planning. Do know a law practice management law firm marketing plan is not efficient if you just bring in people who desire to pay the most affordable cost for a service. Rather, you want to focus your law practice management and law firm marketing strategies on bring in customers who will end up being long term assets to the firm.
There are basically four ways of determining just how much you should be charging for your services. Lets move right into those now.
The Market Method In Law Practice Management Prices
Get your assistant to support you in this law practice management job and spend some time finding what the range of pricing is in the neighborhood. To keep it simple for them include a stamped, self-addressed envelope with a list of the most typical services provided in your practice location. My recommendation in law company marketing planning is to charge at the 75% level of the list.
Remember that in general it is not a excellent law practice management strategy to contend on cost. The majority of 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 Rates
This law practice management pricing method is really uncomplicated actually. The most typical mistake in law practice management using this approach is to disregard to include some type of your expense.
In law practice management frequently you count yourself out of the expenditures 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 should think about one wage as due you for your time and competence as the specialist and supervisor 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 used by numerous vehicle 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. If the mechanic spends less time than allotted for the job, he makes more. He makes less if he spends more time than designated. But in the end, all of it levels (well, usually to the mechanics' favor if you ask me). Another example using this approach is how handled healthcare has actually used this system with doctors and health centers . Legal representatives can use this system if they want.
The " Guideline of 3" in Law Practice Management Rates
This " guideline" called the "rule of 3" utilized 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 of it and they will like it. To start we are going to be believing in thirds. For the first 3rd we will take the total quantity of salaries/bonuses (not benefits simply incomes-- benefits enter into the 2nd 3rd coming next) for the earnings generators and/or timekeepers (this includes you if you are producing income) and call that our very first third. So include up the incomes of the lawyers, paralegals, and legal secretaries who create income or are timekeepers and call this your very first third (lets simply say that number was $100,000 to keep it basic). Whatever that number is take that number once again and it is your 2nd third which we will call your "overhead" ( therefore that 2nd third is $100,000 and do not forget you if you are doing some handling partner type responsibilities since that part of your time goes here in overhead). Take that 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 total quantity (in this example $300,000) and now find out how much you should charge per billable hour, per repaired rate or the number of contingency fee cases won to be sure you hit the target we need to hit offered our very first third number times three (in this example $300,000).
This method reveals you how much per hour you need to charge. If you are the owner of the practice you deserve a fair earnings as well do not you concur? If this approach is a bit too complicated do feel totally free to contact me and I will help you arrange it out in a couple of minutes on the phone.
It is a excellent idea to believe through all of these pricing approaches in determining your law practice management rates strategy before setting a cost and moving ahead with a law office marketing plan to ensure you are thoroughly exploring all options. Keep in mind the tendency find this for many legal representatives is to price too low. Don't do that! In another post I will tell you how to speak with prospective customers so you never have a problem getting the cost you deserve.