- Who & Why?
All Posts Tagged Tag: ‘Fees’
A common conversation I have with attorneys revolves around the almighty billable hour. Depending on how long they have been in practice and where they are in their career, they are either wondering how to monitor the hours (i.e., hire/fire others who don’t meet them) or trying to figure out how to meet their own hours.
One thing applies to all of them across the board when it comes to billable hours- they are all stressed out. Many are to the point of obsession about their billable requirements. This obsession leads to all sorts of nasty things- like paralysis, I dare say. According to my research, there is a direct inverse correlation between your self confidence and stress. The higher your stress, the lower your self-confidence and thus, the poorer your personal brand for others.
So what, you say? What does this have to do with my billable requirement?
Well, I believe that the pressure to bill X number of hours leads to higher stress and less productivity. In other words, lawyers produce worse and less. The other detriment of this is of course that lawyers are angry, anxious and perhaps at the point of desperation where they’ll compromise their integrity to bill enough….all leading to a bad public brand perception of our industry.
What if there was a peaceful, productive atmosphere and less angst around the almighty billable? I’m not disillusioned when I suggest this- I’ve been there, done that. It didn’t work then, it hasn’t worked for others since. And it is only getting worse.
If you are “in charge” and reading this consider creating a work atmosphere that is less tense and focused on the billable hour. Try something new and be daring. It can’t fail.
If you are reading this and you are identifying with my message because you “must bill”, then what about trying something new. What if you work it the other way: set your PERSONAL weekly billable goal lower and exceed it. Watch the stress go down and your productivity and happiness go up. Also, consider what’s the worst that can happen if you don’t bill “enough”? If the answer isn’t “death” then I think you know what to do.
These days it seems everyone is under more and more stress. In addition to our job/business, we get to juggle kids, spouses, pets, family, business trips, staffing issues, networking and a whole bunch of other issues that could make this list too long and too overwhelming.
If you are a lawyer, it seems your list may be longer than the rest. That there is the problem. Maybe your list is longer, maybe it is not longer. The end result is the same- not good for your personal brand or business brand. The higher your stress level, the lower your self-confidence and thus the worse your personal brand.
As a lawyer, if our stress is high and self-confidence low, then we tend to do some odd things that tend to leave us with lost referrals and lost revenues. We try to compensate for our stress and self-confidence by:
- ignoring clients
- mis-treating staff and colleagues
- behaving and communicating as if we are “too cool for school”
- complaining about our “hearings”, “trials”, “mediations”, “travel schedules”, “CLEs”
Every single lawyer client of ours has the stress issue, whether they are with a big firm or solo practitioner or in-house with one of our corporate clients. Here are just two common reasons we’ve deciphered as to why.
- Fee type: If you charge on a contingency consider this: You may feel under-payed (or maybe never paid?), so you compensate by figuring out how much you “have” to work in order to have the contingency fee pay off. Consequence: you may be mis-treating your clients because you can’t budget for them. Bigger consequence: you are stressed, bothered by client calls/emails and have a poor personal brand wherever you go. Solution: Don’t take a case if you can’t give proper support to the client because you feel undervalued. It’s not like the client begged you to take their case. You signed up for it. The alternative is possible malpractice or lost clients. Your choice. If you are in the midst of a contingency case and the client has done nothing wrong, don’t drop the ball and don’t quit. Finish the case with integrity and do your best.
- Not enough support: Your firm may not have enough lawyers on staff to be able to have everyone manage a decent workload. Or you may not have proper support at your firm to help you out with the workload. If you are a solo practitioner, you may not feel you can afford a paralegal or legal secretary. Consequence: You are spread out way too thin and can’t provide quality service. You don’t take client calls and emails. You’ve got a professional responsibility issue on top of a personal branding problem. Solution: HIRE more help! Don’t be cheap. Don’t hire a law student to do the work of a paralegal or another attorney. The consequences of running lean are far worse than paying someone to help.
If you are in the San Diego area, Katy will be speaking on a CLE panel regarding stress and dispute resolution on September 6 from Noon to 1:30pm at Mintz Levin LLP. For more info, email us.
As part of the personal branding programs we offer businesses, we often review fees for services and suggest an increase in fees. Often a fee increase is absolutely justified given the personal branding work the client has done to themselves and their businesses.
As service providers, clients often wonder how they could possibly justify an increase in their fees. They seem stunned that in “this economy” why would anyone pay us more? We’re always stunned by how little businesses value their quality work product and personal brand recognition and growth.
So how can a business possibly raise their prices? And, why would anyone want to pay you more for your services? The answer is a simple one. It’s all about how a business packages their services. And by “package” I do not mean the pretty red bow on the box or in business terms, your logo or slogan or colors.
By “package” I mean how you “own” and represent your service offerings and their worth to your prospects.
So Company “A” offers legal services to their clients. They don’t spend much time with prospects explaining their offerings and benefits in relations to the client needs, nor do they get out into the community to relate to their client base.
Company “B” offers the same legal services as Company “A”. However, Company “B” has done their personal branding work and knows that their services are in line with who they are and their talents in that particular area of the law. Their unique selling propositions as people have been built into the service offerings and the manner they are offered. Company “B” knows where to network and do community service in order to stand out as unique with their legal services and offerings. They also know how to explain these unique traits to prospects and referral partners so that they sync up with prospects and referral bases’ realities. In other words, Company “B” has an attractive package for their legal services. Therefore, Company “B” has earned the right to legitimately increase their fees- they can justify their value and bring a quality of service to their clients based on the increased fee and then some.
So which are you, Company “A” or “B”?
I spoke at the American Bar Association (ABA) Mid-Year conference in Atlanta, Georgia last Friday. Nothing like thousands of us lawyer getting together! One panel discussion I found to be particularly interesting was regarding fee structures within the legal community. Traditionally, lawyers and consultants charge an hourly fee for their services. However, for many years the conversation has turned to the implementation of a value-based fee instead. This is where, instead of billing hourly, the client is billed a flat fee sum based on the value to be provided. Often the entire sum is paid up-front by the client. The rationale for a value-based fee is that it reduces conflicts of interests on the part of the lawyer and increases a relationship built with your clientele over the long term.
On the panel were representatives from several companies that use value-based fees with law firms they employee. These corporations included Wal-Mart, Pfizer, and DuPont. All of the representatives said the same thing basically: value-based billing builds client trust and a strong future relationship. The rationale is that the corporation feels like they are employing your service because of its true worth and value and don’t have to keep worrying about you running up the bill instead of focusing on providing quality service. According to the law firms represented on the panel providing value-based fees, not only is it a profitable model but good for marketing and client development.
Each of these law firms had a strong marketing plan and had done their homework regarding fees and client needs. They had also done the risk/benefit analysis concisely. After all, switching your fee model is not an over-night strategy and not one to be taken lightly because of its far-reaching consequences.
What was most interesting to me was the way in which the corporations viewed the law firms with which they worked based on value-based fees. Maybe I was the only lawyer in the room that was listening with a marketing ear. It seemed to me that each corporation felt a deeper connection with the individuals at the firm with whom they worked and felt they could carry on business with the firm for the long term. Each lawyer in that firm had personally branded themselves as affordable, cost-conscious, ethical, effective, forwarding-thinking and flexible.
I’d like each of you to stop and think about your current fees and pricing. This thinking and marketing strategy does not just apply to lawyers. Your fees are a direct reflection of your personal brand and your corporate brand. After all, people buy people because the people serve within the companies. I’m not suggesting that value-based fees are for everyone. However, fees have to be set based on your type of business, target market, and competition. Fees have to be reviewed regularly with an eye towards the changing times. What you choose to charge and how you structure your fees is a direct reflection of how people view your personal brand. Do you and your company look greedy and inflexible or do you have fees that make you competitive and about the value you can provide your clientele?