Are you charging your clients enough?
It is a hot topic at the moment, solicitors costs, with Jacksons proposals etc. and of course as a profession we are often ridiculed for the level of our fees. I would invite lawyers to ask themselves;
- Are we charging with any relation to the value for the client?
- Does the price represent the risk we are assuming for the client?
- Do we know what it will cost us to do the work?
In my experience, many (possibly most) lawyers will not even consider the first two questions when putting together a fee quote, and simply not have accurate information about the last one to know the answer. What they will do is either;
- Guess how many hours it will take and multiply by their wholly arbitrary hourly rate, or
- Pluck a figure from thin air and hope for the best, or worse still
- Just quote an hourly rate which the client will hate
I would describe this as ‘working with unknown unknowns‘ or guesswork which in today’s market is nothing short of madness. Lawyers need to understand their clients better, what is important to them, what is not important to them and what risks will the lawyer be assuming by doing the work.
Discussing these issues with the client will allow informed decisions to be taken by both parties. Allied to this ought to be business intelligence about the likely cost of production for the work. Lets be honest, as lawyers we don’t break ground that often, we repeat processes and transactions. Frankly if we are breaking ground then value to the client is enhanced and the price ought to be.
There are tools out there which will capture the true cost of production, see – www.rekoop.com as just one example. All too often we rely on human input rather than automated tools and the only thing you can guarantee is that this will be inaccurate and will create an inbuilt discount for the client as time is under captured.
Would a car manufacturer or a retailer set prices with a finger in their air? No!
So why do we as a profession?
We don’t have to is the answer and all it takes is some investment in time & technology allied to a change in mind set.
Sounds easy when you say it quickly!