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Are your fees reasonable?
MyCase features my guest blog post suggesting that there is plenty of work for those lawyers willing to be realistic both in the nature of the clients they serve and the fees they charge.
While you're at their web site, check out their software. It has been reviewed by many and is well - regarded.
Newsflash: McDonald's focuses on "value"
McDonald’s advertising is changing, according to one report. Last year, Big M promoted higher-priced menu items. While more healthy food is important, Big M couldn’t show the value of its new menu items to the consumer. Today, the company's emphasis is on “value,” the lower priced items that its customer base is accustomed to receiving.
If your market is the commodity-type legal services, then you will have less flexibility in setting legal fees. If your market is more toward the unique, the special or the bet-the-company type practice, then you will have greater flexibility and can charge more for your services. The key element is to understand the nature of your customer and then communicate effectively with the client.
LawBiz® Legal Pad On the Road!: I'm Thinking
As Ed continues "On the Road!" he explores ways attorneys can relate the cost of their services to clients, who might be demanding a reduction.
LawBiz® Legal Pad: Reduce Client Fees Without Discounting Legal Service
Ed discusses two ways lawyers can lower the cost to clients without discounting the legal service.
LawBiz® Legal Pad: Write Downs and Write Offs
Ed speaks about collections: lawyers effectively collecting on all that they bill.
LawBiz® Legal Pad On the Road!: Practice Development
How do you set yourself apart from your competition? Here's a hint - don't lower your fees!
Alternative fees - proportionate refund
An interesting question was raised recently in the discussion about alternative fees. What happens in either of two scenarios: i) When the client terminates the relationship before the legal services are concluded and ii) When the fee is challenged in a dispute between attorney and client.
In the former case, how do you apportion work already done versus work yet to be done, especially when the fee agreement is silent on the subject? This question is set against the backdrop that a lawyer refund any advance payment of fee that has not yet been earned. And, though a fixed fee, the fee must be placed into the client trust account until earned. Does one have to refer back to the time spent (hourly billing)? And if the subject is covered in the fee agreement, are we building into the relationship all kinds of negative vibes between attorney and client?
And, though fixed fees/alternative fees are designed to reduce conflict between attorney and client, should a dispute arise, how do we test the reasonableness of the fee? Again, usually by reference to the hourly billing rate and time spent.
This subject once again points to the need for good client relations and effective, frequent communication between attorney and client to make sure such disputes don't arise and/or are settled quickly.
Lawyers fees are capped
Wisconsin is in the news again. A lawyer, who promoted himself as the "king of lemon law," won a judgment for $12,500 against an auto dealership for unauthorized repairs and an award of attorney's fees of $150,000. The Republican-controlled legislature was so incensed that they adopted a law (and signed by the governor) limiting attorney's fees at three times the judgment. With such limitations, lawyers will be less likely to tackle consumer abuses, the obvious intent of the legislature.
Wisconsin, the historical bastion of progressive legislation and politicians, has certainly served up a strange mixture of bedfellows in the last couple of years. It makes for interesting reading ... unless it's your ax that is being gored. The real question is whether this is limited to the state of Wisconsin or a harbinger of things to come on the national level.
Ten Keys To Running A Successful Small Or Solo Firm
From time to time, we will have a guest on our blog. This is something new for LawBiz Blog and we hope you find value in the expertise of those who will join us on occasion.
This week, Erik M. Pelton with Erik M. Pelton & Associates, PLLC is our guest blogger.
Creating and managing a successful solo or small firm is no easy task. But given the tools available today, it is easier than ever. And more and more clients today appreciate and even seek the personal relationships provided by boutique firms. Here are ten keys areas which every small or solo firm can master to propel it to greater success, growth and profit.
Marketing
To build a successful practice, marketing is key. Does your firm have a brand? Do you have a picture of your ideal client and a plan to get your name in front of them? Successful marketing could include: website, print ads, speaking engagements, attending and/or exhibiting at conferences, local or industry networking events, social media, writing for magazines or newsletters, apps, firm newsletters, blogging, and much more. Try them all and figure out which you enjoy, which you excel at, and which provide the greatest return of investment of time and money.
Hiring
Unless you are truly solo, you will have a staff of one or more at some point. In fact, unless you are super-efficient or already established, a staff is likely necessary to manage a growing firm and the marketing needs. When hiring, attitude, personality and character are at least as important as experience and skills. Skills can be taught. But bad character or clashing personalities cannot be overcome. Reward staff that is trusted and hard working. Delegate and provide support and oversight, but allow staff room to grow and figure things out on their own. And when staff does not work out, cut your losses and move on.
Efficiency
Small firms have a great advantage over large firms: they can be far more efficient. Less layers of review and bureaucracy. The most significant efficiency is the use of computers and I.T. to create efficient systems for repetitive tasks – docketing procedures, templates, managing client contacts, and much more.
Communicate
Smaller firms can provide more personal services. Attorneys can and should respond to all phone calls within 24 hours. Stay in touch with clients during their representation to manage expectations. Learn as much as possible about your clients’ businesses and industries so you can provide them better advice and get more work.
Setting Fees
Setting fees is of course critical to any law firm. Whether billing hourly, flat fees, or another mode, clients should pay commensurate to the value received. The value depends on the service provided as well as the degree of experience and availability of comparable services. By becoming a thought leader, an attorney can differentiate him or herself from the competition. Competing on price alone (with low fees) is not a long term recipe for success – eventually someone with less experience and less overhead will undercut your low fee.
Managing Docket
To be successful, any attorney must have a firm grasp of deadlines, due dates and obligations. It is critical to have a ‘master’ calendar that is always up to date and contains every obligation. In order to effectively manage time and delegation, you need to know both the small picture and the big picture when it comes to the docket.
Purge bad clients
Bad clients can weigh you down. One or two problem clients can suck a huge percentage of time and energy from the practice. Learn how to avoid bad clients. And when you get them, figure out how to get rid of them as quickly and ethically as possible
Use interns or law clerks
Law school interns and law clerks are great for a variety of reasons: free or low cost labor; a valuable experience for the mentor and the mentee; a great source of potential employees or referrals in the future.
Specialize
To eventually set very high fees, clients must come looking for you because you are an expert at something. To establish yourself as a ‘thought leader,’ you must have a specialization – no one is an expert at being general.
Make a name for yourself
Speak. Write. Blog. Raise your visibility in your specialty are ways to become a thought leader, gain the respect of peers, earn referrals, and charge higher fees.
In future posts, I will examine each of these tips in more detail and cite specific examples from my experience which includes founding my own firm, five years as a solo attorney and six years managing a boutique two lawyer firm.
© 2011 Erik M. Pelton
Raising Legal Fees
Ed recognizes that raising your legal fees just doesn't "fly". This week, he offers some tips to raise the revenue of your firm without necessarily raising your fees.
No, It's Not the Same: Pricing vs. Billing, Part 2
Ed advises: keep track of your work, bill timely, and collect efficiently.
Legal fees seen as "nickel and dime"
Just a thought to consider, before we lump them into the "nickel and dime" category. Just because it's different doesn't make it wrong.
(Never thought I'd defend an airline practice!)
Collecting Your Fee mentioned
“… a client who genuinely respects you and the work you did will pay your bill in a timely manner.” ED Poll (2003)
In meeting Ed a few years ago and having the opportunity to speak with him on several occasions, I can’t help but say that those few words embody AR collections. Not just law firm collections, but all collections. When we communicate with our clients, we need to keep in mind that every communication either gets us closer to payment or further from a payment. Our motivation, if you haven’t already seen it, should be closer to receiving payment!
