We had a member recently ask us about a good way to inform clients who have been with her for awhile (and that she likes working with) that her rates would be going up.
This is a great question and something that many lawyers struggle with. We see many of you out there not charging enough for your time and work. One of the things we teach our members, and those in our Boot Camp Programs, is how to implement flat rate pricing rather than offering services on an hourly basis.
Charging hourly is often the root of a variety of problems for many lawyers. There are only so many hours in a day, so your capacity to earn and serve is automatically limited with an hourly model of service.
While each situation is unique, we will use the following example to demonstrate how to provide general counsel using flat rate pricing as a means for inspiring your own transition on the path to earning what you are actually worth.
Our member had been providing general counsel services to longtime clients she genuinely enjoyed working with for years. She was charging a very low hourly rate and really undervaluing her services. Our first suggestion was for her to answer the following questions:
1) Do you like working for this client?
If the answer is no, then losing them will open up the space to attract new people you do enjoy working with. If the answer is yes, continue with the following questions:
2) How much time are you allocating to the work each month?
Take note of how much time you are spending on work for this client and the average rate you are charging them each month for your services. This will help you determine the services you are providing and how much revenue you are receiving from them.
3) Are there ways you could be more efficient with the time you are spending with them? This is an important question because it is easy to get stuck in inefficient work habits. For example, instead of responding to every email that comes in, set up regular meetings with your client so that you can discuss issues that need to be addressed all at once.
Finally our recommendation to her for this situation was:
“Instead of charging hourly for every issue that arises, create a $2500 membership program that they pay monthly. (This price should be based on the average amount they are already investing with you). Schedule a weekly meeting with the main contact at the company. This saves time on the need for communication every time an issue comes up. Let them know that you will be implementing a new service model and will eliminate inefficient hourly billing which will streamline your ability to serve them at a higher level. Explain that you will be maximizing your time helping them get the outcomes they want rather than nickel and diming them and tracking every minute of your time. By paying a predictable, flat fee each month, they can count on regular, quality time with you to review legal issues that arise. They can still email during the week, but unless it is an emergency, deliverables will be saved for the weekly call. Once that groundwork is laid and consistent communication is established, you will have the ability to accomplish so much more on the road to the long term success of both of your businesses – a true win-win!”.
While this is a specific example, we know that many of you face this situation often. How to begin charging more for your services when you know that a higher fee accurately reflects the the actual value of working with you. This example can be adapted to a variety of service areas. Hopefully it will inspire you to look at creative ways to create efficient systems that reflect the true value of what you offer.
Are you ready to create the law practice you have always dreamed of?