Keeping It Practical: Tips On Pricing, Billing, And Client Communications | ABA Law Practice Today A Law Firm Billed A Client

By Mark A. Robertson on May 12, 2017 ·

The custom about constitution is a profession, however it is too a business—one in which every lawyer is to blame for both client committee including personal including firm financial matters. Whether you are practicing in a company or solo environment, the selling about constitution is each bit as important as the custom about law. Here are 12 tips for making sure the selling about your custom runs smoothly.

1. Contemporary period keeping.

Contemporary period keeping equals more money, to a greater degree records, including less probability about billing errors including malpractice. No situation how frequently we say this, too various lawyers work not remain contemporaneous period records while they are working, including therefore are guessing at the period they spent on top of specific matters—sometimes at the ending about the day, too frequently at the ending about the week or the month. Failure to remain contemporaneous period records is an invitation for disaster or worse.

2. Review your hourly rates on one occasion a calendar year including determine whether the rates should change.

The worth about selling goes up each year. Whether it’s rent, office expenses, employees salaries, filing fees or the like, it costs you more to custom constitution this calendar year than it did last year. While you may not habitually exist capable to adapt hourly rates or fixed fees each year, you should review your hourly rates including fixed-fee structures annually to determine whether adjustments miss to exist made. If an adjustment does miss to exist made, see whether the adjustment should simply exist an incremental worth about living adjustment or something more. Many advocate that, assuming you’re going to adapt the speed or the charge charged, it should exist through a meaningful number—you should decide. When you work make an adjustment, give clients abundance about caution including an explanation.

3. When changing your rates, offer clients the opportunity to “buy” hours in advance.

When we have made a decision to alteration our hourly rates, our firm has offered clients the option about “buying time” at the lower speed through paying money into our trust report for be employed to exist billed at the lower speed till the funds are exhausted.

4. Consider whether you should set for home expenses including how.

Many constitution firms are dropping charging for home expenses such as copies, faxes, postage, printing including the like. Such charges can exist an annoyance to clients—some clients regular require their external constitution firms to not set for those expenses, believing that such charges should exist a part about the fees charged. If you are going to charge, should you simply set a percentage about the fees as an administrative overhead charge? Unless the client required a detailed failure about the home expenses, our firm charges 1½% about the monthly fees as an administrative set including specifically cover up this in our appointment letter.

5. Determine assuming the types about be employed you work justify multiple hourly rates.

Many lawyers custom in various areas about the law. Why should you have a single speed regardless about custom area? I work a group about main corporate work, securities be employed including high-net-worth lands planning in my practice. The hourly speed that I set for main corporate be employed is much less than the hourly speed I set for securities work. Because about the creation about securities be employed including the higher malpractice insurance premiums that be employed requires, my securities speed is dramatically higher than my level corporate rate. Consider whether the types about custom you have warrant different rates.

6. Your charges is the the majority important piece about newspaper sent to your client.

I could devote an entire book to this subject. Fees, pricing, including billing are important not only from an going standpoint to a lawyer including the constitution firm, however in marketing judicial services. A client’s receipt about your charges is frequently as welcome as a trip to the dentist—even assuming it is within or under budget. The subsequent are some helpful tips to consider:

• Remember that your charge agreement is an important marketing implement in extra to an important judicial document setting forth yours including the client’s responsibilities in the representation. Fees should exist discussed at the beginning about the relationship including preferably at the beginning about every modern matter.
• The charges to the client (whether based upon an hourly speed or a fixed fee) must project value to the client. Bills must project value to the client.
• Don’t let hourly period including rates alone determine the value about your services. Many clients are looking for alternatives to hourly rates including prefer a fixed or measurable charge structure that can exist budgeted including controlled.
• Use the billing information you already have to found profitable pricing including fees for repetitive services.
• Bill frequently. Large bills sent months or a calendar year following a situation has begun or at the conclusion about the appointment are more difficult to pay including are frequently a client relations mess.
• Consider preparing the bills independently in your word processing system rather about sending your client what looks like a computer printout. Add a hand-written personal note on top of the bill.
• Your charges should exist on top of the nicest bond paper. It is probably the the majority important piece about newspaper you give to the client from your standpoint. Some firms regular hand take bills to their local clients. This too imparts the importance (and urgency) about the bill.

7. Data mine your files including bills to identify types about matters that are candidates for alternative billing methods.

In establishing systems to to a greater degree custom constitution as well as developing alternative billing methods, the finest resources you have are your old files including bills. If you have you're on five or 10 or 15 about the same kind about situation in the last few years, you should exist capable to look at those matters including determine what the variables are, as well as what the billings were in order to found a system for running that kind about situation as well as possible alternative charge arrangements.

More including more clients are insisting on top of attorneys providing alternative arrangements to the billable hour. While some matters may lend themselves to a greater degree to fixed fees or success fees, assuming you have you're on sufficient about only specific kind about judicial matter, you should exist capable to found parameters for determining whether some kind about alternative plan might be employed for your clients.

8. Consider alternative charge arrangements for matters that are suitable or where clients have asked for it.

The benefits about alternative charge including pricing methods are many. They frequently result in closer relationships accompanied by the client, fulfilling attorneys for expertise, efficiency, including great results including fewer charge disputes accompanied by clients. In examining alternative charge arrangements, lawyers must think back to that value does not habitually relate to cost. Keeping period was originally a measure about cost—it only later became a means to charges fees (and therefore a “value” measure). We must think back to what the client’s objectives are when billing for our services.

If you are proposing an alternative charge plan in lieu about an hourly speed fee, at least you don’t have to say “I don’t see how much it drive worth because I don’t see how much period it drive take.” But what work I say to the client about the proposed flat charge for the lands planning be employed she needs?

• Start accompanied by understanding your client’s needs including values. Good client communications is important in all matters handled for clients, however it is expressly important when using alternative charge arrangements including value billing, where satisfying the client’s perception about value is paramount. Communication accompanied by a client is critical to found including outline what the client wants. What are her objectives? Does she wish for a Mercedes or a Volkswagen? Preparation is 90% about successful communications about a proposed charge plan accompanied by a client.
• Early in the process about establishing an appropriate charge plan accompanied by a client, you should elicit what the client’s goals including expectations are in the matter. This may not exist easy, as the client frequently has not formulated a goal or may have an objective that is not disclosed specifically to the lawyer. The definition about objectives may exist an ongoing process. It too is critical to determine as beforehand as possible, based upon the then-known facts, whether the client’s goals including expectations are reasonable including attainable.
• You too miss to understand how the client is going to measure the value about the services you are providing. A real lands client may employ square feet or the figure about lots to break down the costs including hence the value about something for a project. A buyer may look strictly at the dollar cost. Understanding how the client measures including determines value is critical to establishing including communicating your proposed charge arrangement.
• Collaboration. When knowledge what your client wants including needs including how they measure value, your discussion should exist collaborative rather than positional or confrontational. Often a group about give including grip between the lawyer including client is necessary to found a scheme including a charge arrangement. Keep it collaborative therefore your charge plan is considered through the client accompanied by an open brain including not defensively.
• Communicating your charge proposal. Follow these steps when communicating your charge plan to your client:
  • Define the benefits about what services you are proposing.
  • Define the room about the representation: what is included including what is not included in the fee.
  • Outline the timing about the be employed to exist performed.
  • Describe the payments terms.
  • Describe the creation about the proposed fee—is it a percentage, fixed, adjusted hourly rate, etc.
  • Finally, give them the dollar number.

The client is with child the figure including drive attend carefully till they overhear it—after that, they drive typically focus only on top of whether that is higher, lower, external their range, etc., including won’t overhear much else. To help your client understand the full room about what you are proposing, the amount should exist last.

• When discussing the fee, you should outline the value proposition in language about the client’s desired outcomes including not the documents you are preparing or other be employed you are away or through|performance} for them. For example, in suggesting a charge for an lands plan, talk about how the scheme drive meet the client’s needs to avoid family conflicts, remain the riches including beneficiaries private means of} using the trust rather about a drive that must exist probated, providing for a special needs beneficiary, etc. Then, to meet those needs, we drive arrange the subsequent documents… (showing the effort you drive go means of} to found the plan).
• Giving a client choices: some projects can lend themselves to multiple types about charge proposals. Don’t think you have to offer lately only to the client. In my private positioning securities practice, I have been offering options to clients since 1982 accompanied by great success. Through understanding accompanied by away or through|performance} a figure about private placements, I was capable to develop an a fixed charge for preparing the positioning memorandum including other documents needed, to exist paid before the final documents were delivered to the client for printing, accompanied by a success charge paid assuming the offering closed. In each charge agreement I too offered to work the be employed at an hourly rate, accompanied by an estimated range about what it might cost. In 31 years about offering clients the choice, they all liked having the choice, although very few opted for the hourly rate. The certainty about the charge including how much was coming not in about their own pocket assuming the deal didn’t sell (and the fact that it would all exist paid not in about the deal assuming it did sell) was sufficient to convince the majority clients that an alternative charge addressed their value concerns.

9. Look at substantive systems including employ alternative fees.

Substantive systems are not only helpful for freeing-up lawyer time, however the systems can too exist used for marketing judicial services including establishing fixed fees for repetitive work. Many areas about substantive constitution custom lend themselves to substantive systems. One example is our firm’s corporate practice. We represent various small including medium-sized businesses. These services contain advice on top of structuring businesses, merger or managerial documentation, deal work, mergers, acquisitions, dissolutions including other widespread corporate work. The firm uses a figure about substantive systems for away or through|performance} this judicial work.

We have a fixed-fee corporate committee system where we arrange annual minutes, act as a system agent, work a corporate compliance check including arrange special meeting minutes for clients for $200 per year. This is you're on accompanied by a substantive system using document assembly to generate the correspondence, reminders, minutes including questionnaires that in the majority instances requires only 10 to 15 minutes about a lawyer’s period per company per year. Some companies may require several hours about lawyer time, however the average, spread not in over several hundred companies, still makes the be employed quite profitable—and so far a bargain for the clients. For an extra $300 per year, the selling client has unlimited phone including e-mail consultations accompanied by our lawyers. The firm is capable to employ this pricing strategy to interest modern clients in extra to generating important extra be employed as a result about the audit questionnaires including phone consultations, which frequently find extra judicial needs about the client. Being the system deputy for the company too generates potential extra case matters, since the constitution firm has received the system about process as system agent. By using this substantive system to work corporate work, the firm is capable to organize its corporate be employed to a greater degree while marketing extra services.

Lawyers can (and should) identify areas about their individual practices including develop substantive systems using document assembly to leverage their delivery about judicial services accompanied by technology.

10. Establish a retainer procedure for all modern clients, some (or all) existing clients including expressly for all case matters.

Getting your money in progress is habitually to a greater degree than waiting to get paid following you send a bill. Having a retainer procedure that requires clients to pay funds into your trust report to exist billed against is lately noise selling practice. While some lawyers limit this to modern clients prior to the establishment about an appropriate payment history, it is not a bad idea to see having a retainer procedure for each situation handled—whether from an existing or modern client. This is expressly correct in case matters, where it is much more difficult to withdraw from a case scheduled to failure about clients to pay their bill.

11. Consider evergreen retainers.

Evergreen retainers are retainers than have to exist replenished before the ending about the next billing cycle. This is a means to stay ahead about the game. Estimate what drive exist required every four weeks as a base retainer amount including don’t let the client fall behind. If you have a allowance for the situation including see that certain phases drive have larger fees, outline this in your appointment agreement including adapt the retainer requirements as the situation moves forward.

12. Written charge agreements for every engagement—even for existing clients.

While this is required through various states including for certain types about matters, it is a great idea to have an appointment agreement for every situation you are running for each client. The appointment agreement not only establishes the charge that drive exist charged for the matter, however too should clearly defines what you have been retained to work including which have not been retained to do. Even assuming you have a longstanding relationship accompanied by the client, covering the special appointment in writing is important.

About the Author

Mark A. Robertson is the managing partner about Robertson & Williams Inc., a constitution firm in Oklahoma City. Contact him at 405.848.1944 or mark@robertsonwilliams.com.

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