Charging clients more because you are worth more

April 16, 2015 by
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I heard from an attorney who says he gets tongue tied speaking with prospective clients about fees and tends to lean towards charging less. Even then, he’s afraid they will think he charges too much.

I told him to write out what he would say to them if he was confident about his fees–why he charges what he does, the benefits he offers, why he’s worth more than other lawyers, and so on.

Write it, read it, contemplate it. And then post it, or a version thereof, on your website so that prospective clients will be able to read it before they ever speak to you. They will understand that you charge a bit more but you’re worth it.

You might want to try this, too. Write down all that you do for your clients, from soup to nuts. Write down all the little things you do to make their experience with you as comfortable as possible. Write down all of the things you do to help them achieve a successful outcome.

You don’t have to post all of this on your site but you do need to see the value in what you do. You need to understand why you are worth more.

But what if you don’t believe you are worth more?

Then you have work to do. Because if you want to charge higher fees than you currently charge, if you want to charge more than other lawyers charge, you have to believe that you are worth more.

If you believe it, you won’t have any trouble talking about fees. You will do it confidently. It is a selling point for you. You want clients to know that when they hire you they get incredible value for what they pay.

Charging clients more comes down to believing you are worth more.

But keep in mind that when it comes to something as abstract as fees for professional services, value is relative and perception is everything. You’re worth what clients are willing to pay and you’re willing to accept.

No more and no less.

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Filed Under: Attorneys fees, Client relations, Closing the sale, Fees and Billing, Handling objections, Online Marketing, Personal development

How to earn more by working less

April 1, 2015 by
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No doubt you’ve heard of Parkinson’s Law, which says that, “Work expands so as to fill the time available for its completion”.

Translation: most people waste time.

You can get more done in less time by allocating less time to tasks and projects. That means allocating one hour for a task instead of two hours. Or assigning a due date in 48 hours instead of a week.

Having less time available gives you greater focus. You make quicker decisions. You let go of perfectionism. And you work faster.

You get more done in less time because of Horstman’s Corollary to Parkinson’s Law: “Work contracts to fit in the time we give it.”

Translation: you waste less time.

The problem is, when you’re in charge, you can do what you want to. If you want to extend a self-imposed deadline, you do it. Hey, nobody will know.

One solution, which I have talked about before, is to make sure that somebody does know. Make yourself accountable to your clients, your spouse, your employer, your staff, or your Maker. Tell people what you’re doing and when you’ll finish. Make it a promise or guarantee. And ask them to hold you accountable.

You can also train yourself to set and keep shorter deadlines by continually reminding yourself of the benefits for doing so.

Every day, spend a minute or two cogitating about the benefits of getting more done in less time. Think about how much more you earn by completing projects in less time. Think about how much extra time you have for other paying work. Think about how much extra time you have with your family or for doing other things you enjoy.

At the start of your day, look at your task list and calendar and make a conscious effort to shorten due dates and assign less time to tasks. At the end of the day, record how much time you saved on each task. At the end of the week, add up the amount of time you put into your “bank”.

What about work that is billed by the hour? If you can draft a document in one hour instead of two, you must do so. Raise your hourly rates accordingly because apparently, you are worth more than you thought.

Or, as I have repeatedly suggested, move away from hourly billing to flat fee or project based billing, which is ultimately better for you and for the client.

Don’t sell your time. It’s limited. Sell your advice, value, or work product, and earn more by working less.

More on how to earn more and work less: The Formula

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Filed Under: Attorneys fees, Fees and Billing, Productivity, Time Management Tagged With: , ,

An attorney who gets it

November 20, 2014 by
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I may not use the word “posture” but that’s what I mean when I recommend charging top dollar for your services, refusing to discount or match another lawyer’s fees, and being confident enough to tell prospective clients to talk to other lawyers, as I did in yesterday’s post. Virginia appellate attorney Steve Emmert gets it.

After reading yesterday’s post, he emailed me the following:

Hi, David –

I read this entry, and it suggested a related topic. You may recall that I’m an appellate lawyer. Because my state’s appellate bar is small, we all know each other and we’re all pals. I therefore have a ready database of available alternate counsel.

My “related topic” is my fees. I have intentionally set my fees at the upper end of the range for appellate lawyers here. When someone – either a prospective client or one of my “customers,” a trial lawyer – calls and asks about my fee, I tell them up-front that I’m one of the most expensive appellate lawyers in the state. I then quote them a fee based on that premise.

As you might imagine, my fees dissuade many customers and clients from hiring me. I’m never upset when they can’t afford me; I tell them I can find them another capable appellate lawyer who can do it for less money. That makes everybody happy – my pal gets a new case that he would never have seen otherwise, and the client/customer gets to experience the unthinkable – an attorney telling him or her, “Don’t give me your money.” That usually floors them, and I have received more than one message, a year or two later, thanking me for my honesty and for the referral.

Finally, the real point of this overlong note:

Some customers or clients ask me to reduce my fee. My stock reply harks back to the previous paragraph: “No, but if you want, I can find you a capable” etc. This usually generates one of two responses. The first is, “Yes, please, I’d like to save some money.” I give those folks a name or two and then go about my life with a clean conscience. People who want to economize on a lawyer are not high on my target list of incoming business.

The other possible answer, which often comes after a day or two, is “I’ve thought about it, and while I appreciate the offer of a less-expensive lawyer, I’ve decided that I really want you to represent me. I’ll pay your quoted fee.” Imagine what that feels like; these are the kind of customers that you really go the extra mile for.

As you might surmise, Steve loves what he does. He gets to pick and choose the cases he accepts and because he charges top dollar, he doesn’t need lots of business to enjoy a very comfortable income.

Hold on, you say? That’s fine for someone with his years of experience and stellar reputation. One look at his website and you know that this is the guy you want to hire. Most attorneys can’t be that choosy. Most attorneys can’t get away with being “one of the most expensive” in their field.

And you are right. Most attorneys can’t. But far more could do so than even make the attempt.

Look, you’ve got to be good at what you do and you’ve got to be able to prove it. You have to have the chops. You can’t be the new kid on the block and expect to charge what lawyers with thirty year’s experience charge.

But you can charge more than you think.

Most attorneys play it safe. They “price match” what other attorneys charge, or they undercut them. They’re afraid of the competition. They expect that all clients choose their attorney based on price (they don’t) and believe they have to be competitive to get their “share” of the work that’s available.

They operate in fear, not confidence.

Who’s to say you can’t charge more than you do? Who’s to say you’re not as good as other lawyers who charge more, if not better?

I don’t know if you have what it takes to be “one of the most expensive” attorneys in your market, but I have long advocated setting fees that are at least in the upper one-third of the market. Obviously, most attorneys don’t.

If you’re not good enough yet, do what you have to do to get there. But if you are, don’t let a lack of confidence or a fear of losing business to other (cheaper) lawyers stop you from getting what you’re worth.

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Filed Under: Career satisfaction, Fees and Billing, Increase your income, Legal industry Tagged With:

How to eliminate 80% of your law firm’s past due accounts

November 17, 2014 by
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According to a survey by LexisNexis, 73% of law firms report having past due accounts. Lawyers in small firms reported that up to 39% of their total client base is past due.

What causes this? And what can be done about it?

More than 80% of the law firms surveyed said that client financial hardship was the biggest cause. This suggests that the best way to reduce past due accounts is through better client selection. If you refuse to accept clients who are having financial issues, you will eliminate the number one reason clients fall behind.

Make sure clients have the ability to pay you before you do any work. Ask them to submit a financial statement before you accept them as a client.

This is not always possible of course, and financial statements don’t always reflect reality, so in addition, make sure you get a sufficient retainer at the time of the engagement, and make sure this is replenished when it falls below a certain threshold. You can also request collateral and personal guarantees, and get set up to accept credit cards and other financing arrangements.

Next, make sure that you bill promptly and frequently. A delay in billing is one of the biggest factors in clients’ falling behind. If you want to get paid on time, send a detailed invoice no less than every 30 days.

Finally, if you want to avoid large unpaid receivables and write offs, make sure you have procedures in place for addressing late payments immediately after they occur. Don’t let a small unpaid balance become a big one.

These three strategies, better client selection, sufficient retainers, and prompt and frequent billing, should help you eliminate 80% or more of your billing and collection problems and increase your cash flow. For more strategies, get my ebook, Get the Check: Stress-Free Legal Billing and Collection, as a PDF or on Kindle.

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Filed Under: Attorneys fees, Fees and Billing, Law office management, Legal industry

More on lawyers testing a “mimimally viable product”

October 16, 2014 by
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In response to yesterday’s post about expanding your practice by offering a “minimally viable product” (service) to test the waters, I heard from two lawyers who disagree. Their comments and my responses follow.

The first lawyer I heard from added this comment to the post itself:

Not very good advice here, and would possibly lead one down a path to malpractice, test a “minimally viable service”? really?

The “start up world” is not analogous to the practice of law

Could offering a service you’re not competent to handle lead to malpractice? Of course. If you’re not at least minimally competent to handle this new service, don’t offer it. I never suggested otherwise.

If you’re thinking of offering estate planning services, for example, you wouldn’t start by offering to form offshore trusts if you’ve never done that before. You would start with simple wills, powers of attorney, and health care directives, assuming you know where to find the forms, how to fill them out, and what questions to ask to determine if the client needs anything else.

The operative word in the term “minimally viable service” is “viable”. It means the product or service does what it’s supposed to do. It may not have all the bells and whistles or options, but it solves the client’s problem.

This is the second comment, received in a tweet from Richard W. Smith:

“David – enjoy your posts, but disagree with this approach: “Make it as attractive as possible, and price it as low as possible”

He didn’t elaborate, but I’m guessing he doesn’t have an issue with making your service and offer as attractive as possible, he disagrees with the idea of pricing it as low as possible.

If we were talking about offering your regular services, I would agree. I’m the last person to suggest wholesale discounting or competing on “price”. In fact, I believe and have often said most lawyers don’t charge enough. But things are different when you’re testing.

When you’re testing a new service, you want to know if there is a market for it. Your goal isn’t to maximize revenue or profit, it is to see if you can get anyone to buy. So you offer a minimally viable service at an attractive price point. If your test works, if you get clients or opt-ins or inquiries, you then add to the offer (more features, more options), raise the price, and put more time and money into marketing.

If you don’t get “sales,” or you decide you don’t want to handle that new practice area after all, you close the door and move onto other things.

I should have added that in testing the new service, you shouldn’t price it so low as to cheapen what you are offering. Test a new service (or market) by asking for a fee that is low enough that your “price” isn’t the reason prospective clients don’t hire you, but not so low that they think something is wrong with you or the service.

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Filed Under: Fees and Billing, Increase your income, Marketing legal services

A recipe for better clients and bigger income

September 23, 2014 by
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The other night my wife and I watched “Jiro Dreams of Sushi,” a documentary about “Sukiyabashi Jiro,” a famed sushi restaurant in Japan and it’s master chef and owner, Jiro Ono. Actually, she watched it while I dozed, but I caught enough of it to realize a few things.

First, if the reaction of the restaurant’s patrons is any indication, I probably should try sushi one of these days. His customers practically swooned as they consumed their meal, and this in a country that eats lots of sushi.

The second thing I realized is that Mr. Ono is earning a small fortune. The bill for a meal starts at 30,000 yen, which is around $300, and you have to make a reservation a month in advance. That’s for locals. Customers fly in from all over the world and book a year in advance.

What’s the reason for his success? He charges premium prices for a premium meal. He uses only the best fish, which is laboriously prepared and presented. The result is an amazing culinary experience, earning Mr. Ono’s restaurant a coveted “Three Stars” in the Michelin guide.

And it’s a little hole in the wall.

Clean as a whistle, but no atmosphere. Just ten seats. You sit at a counter, Mr. Ono serves you and watches you eat, gauging your reaction. No dilly dallying, mind you. He serves, you eat, and you’re done. “No soup for you!”.

Actually, there is no soup. Or noodles or appetizers. Just sushi.

Anyway, the point is that if you want to have better clients who fly in from all over the world to hire you and pay you higher fees and tell everyone they know about you, you can, if you offer a premium service. Find something you do and make it the best of it’s kind.

You will attract the best clients, the ones who value quality and are willing to pay for it. By charging premium fees, you need fewer clients. But you will have just as many hours available each day and can devote more time to each client. This will allow you to deliver remarkable service that generates repeat business and referrals.

You’ll have it easier than Mr. Ono, however, because he has discerning customers who instantly know that his work product is the best they’ve ever tasted.

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Filed Under: Client loyalty, Fees and Billing, Increase your income, Marketing legal services Tagged With: ,

Miscellany Friday (no, it doesn’t rhyme)

February 7, 2014 by
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Today, I thought I’d share a few miscellaneous items with you and let you choose what interests you. If you like “round-up” posts like this one, let me know.

1. Find Out How Much You Are Overbilling Your Clients

A discussion about how lawyers who delay recording of their billable hours, usually until the last two days of the month, routinely overbill clients by an average of 23%.

Don’t forget to check out my ebook on the subject: Get the Check: Stress-Free Legal Billing and Collection

2. Longer is Better for Blog Content: Truth or Myth?

Do longer blog posts draw more search engine traffic? Apparently so. But do most people read 2000 word posts, and do you have time to write them?

I’ve written before about this subject and have concluded that you need a mix of longer, authoritative posts, to draw traffic, and shorter posts to engage browsing visitors.

3. Legal ethics: Are blogs governed by advertising rules?

Is writing a blog advertising? I don’t think so, and neither does Kevin O’Keefe, the author of this post. And yet various jurisdictions seek to regulate blogs as advertising. Frankly, I don’t think we need specific rules for lawyer advertising at all. General rules (don’t misrepresent, full disclosure, et. al.) do quite nicely.

4. OneTab extension for Chrome saves up to 95% of memory

I always thought I was pretty good about staying focused on whatever I was doing. Throughout my day, I’ll keep a couple of browser windows open, each with six or seven tabs. No problem for a stud like me, right? Boy was I wrong.

I just installed OneTab, an extension for Chrome. It’s a simple thing that collapses all of your open tabs (or whichever ones you designate) into a single tab with links you can click to re-open those tabs. I’ve found that not only does this reduce the drain on memory, up to 95% we are told, so everything works faster, videos don’t stall, and so on, it’s also making me way more productive.

For example, instead of checking email every 15 minutes, I check it when I’m done with whatever I’m working on. Stupidly simple, but it works.

I’m sure there are equivalent extensions for different browsers and platforms.

So, there you go.

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Filed Under: Attorneys fees, Blogging, Fees and Billing, Legal industry, Productivity, Technology

Why some attorneys earn more than you do

January 16, 2014 by
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With my CLE compliance deadline approaching (I finshed, thanks for asking), I’m being inundated with emails offering all manor of courses. I noticed that some companies charge much more than others. In fact, prices are all over the place. I could get all 25 credits for $299 or for $60. Are one company’s courses five times better than another’s? Probably not.

So why would attorneys pay more for something they could easily get for less?

Because some companies are well known to them and have good reputations. Lawyers will order from a familiar company because it’s safe. They don’t need to check them out. Click, order, done. They may realize they are paying more but the convenience and peace of mind are worth it.

I’m sure some attorneys equate a higher price with higher quality. They assume that by paying more they’re getting better courses. Or conversely, that if they pay a low price they will get inferior quality.

Other attorneys simply don’t want to take the time to shop around. They’re busy.

Still others never considered looking at anything else. They simply order from the company they ordered from the last time. They are a satisfied customer. When they get an email from “their company,” they just order.

Make sense?

Well guess what? The same things are true for buying legal services. People will pay more to hire an attorney who is well known to them or who comes through a referral. They will pay more to attorneys who make it easy and convenient to hire them. They will pay more because they believe they are getting more value than they would get from a “cheaper” attorney.

Yes, some clients shop price. You don’t want them. You want the low-hanging fruit, the clients who are willing to pay more for intangibles that are important to them.

And that’s why some attorneys earn more than you do for the same services.

Want to get paid more? Get the Check: Stress-Free Legal Billing and Collection shows you how.

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Filed Under: Attorneys fees, Client loyalty, Fees and Billing, Increase your income, Legal industry, Marketing legal services

What are you NOT telling your clients?

September 12, 2013 by
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There are no little things in marketing or client relations. Everything is important.

I just spoke to someone who went to his dentist expecting to pay $80 for a cleaning but when he went to pay the bill, he had to fork over $128. It seems that when he called to inquire about the cost of the cleaning (he’s on a budget and wanted to make sure he had enough in his account), he was told it would be $80. He was NOT told that there would be an additional charge for the exam.

It is a lot of money (to him). It is a big deal (to him). When he called to ask “how much,” the dentist should have made sure he was told what the total charge would be.

A professional (or any business) cannot be sloppy about details, especially when it comes to money. People notice. Any trust they had for you before will be in jeopardy.

“What else aren’t they telling me?”

Never assume your clients know anything. If you’ve told them the fees and costs, tell them again. If there might be extras, make sure they know and get their okay before you go ahead.

I’m not suggesting you get all paranoid and lawyer-like, (wait, that’s redundant) and get their initials on everything, in triplicate. Just be aware. And sensitive.

Your client is your mother, and trust me, you don’t want to mess with Mom.

Marketing is everything we do to get and keep good clients. Everything. 

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Filed Under: Client loyalty, Client relations, Communication, Fees and Billing, Law office management, Marketing legal services

How to get more business clients

September 5, 2013 by
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An article in Entrepreneur, “Hiring a Lawyer: Five Mistakes to Avoid,” tells startups what to do to save money and avoid getting hurt when hiring a lawyer. If you want to get more business clients, you might want to know what kind of advice they are listening to.

Here are the “five mistakes,” followed by my thoughts on how you can use this information:

1. Hiring a lawyer too soon.

Summary: Some startups hire a lawyer before they know what they want and need. See if there is a pro bono legal clinic at a law school where you can learn about the issues and process. Consider “hiring” them to do some basic work.

DW: What can you do? How about offering free information that does the same thing? Educate your target market about the issues, process, risks, and options. How about holding your own “clinic” where startups and young companies can come and learn (and network) and maybe even get some basic work done free?

You might get endorsed by a business school or community organization, perhaps the chamber of commerce, and get some publicity for your good work in helping the community.

2. Hiring the wrong lawyer.

Summary: Avoid hiring someone who does not specialize in what you need. Get referrals and interview several attorneys before you choose.

DW: Clients prefer specialists (and articles recommend them). Specialists earn more, too. So if you don’t specialize, maybe you should. If you do specialize, start promoting the fact that you do and educate your market about why this is important to them.

3. Hiring a big firm when you don’t need to.

Summary: You will pay more and you may not need to. Many smaller firms have great lawyers, some of whom came from big firms.

DW: Educate your market about the advantages of hiring a smaller firm. Not just lower fees. Smaller firms usually give more personalized attention. Make sure clients know why this is a benefit to them.

4. Not haggling on fees.

Summary: Negotiate fees. Offer equity in partial payment.

DW: Never negotiate fees. You can be flexible about retainers, payment options, and offer alternatives to hourly billing, but never negotiate (reduce) your fees. If you do offer alternative fees, promote the heck out of it. Clients like them.

Take equity if you want to. You could hit a winner. But since most startups fail, don’t go “all in”.

5. Seeing a lawyer as just a lawyer.

Summary: If offering equity, you’re taking on a business partner. Make sure your lawyers have expertise in your field and can do other things for you, e.g., lead you to investors.

DW: Every business lawyer has a stake in it’s client’s business, even if they don’t own any stock. As the client grows, they have more legal work. There are more opportunities for referrals from partner companies, vendors and suppliers. You can grow with them, so help them grow.

Use your contacts and knowledge to help your clients get investors, better financing, new customers, and better suppliers. Look for opportunities for them. Make introductions. Send articles about their industry, marketing, and management. And make sure your prospective clients know that you provide this kind of help.

If you don’t have these connections and knowledge, start developing them. Because the world doesn’t need more lawyers who merely deliver competent legal work. It doesn’t need more lawyers who merely “protect and advise”. It needs more lawyers who can help their clients prosper.

Marketing is not difficult, when you know The Formula.

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Filed Under: Attorneys fees, Fees and Billing, Legal industry, Marketing legal services, Referrals, Specializing Tagged With: , ,
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