Chances are you already know this. You struggle to capture all of your time. You spend the end of the day going through your time records to ensure that you’ve billed your clients for every minute you can. And, like every other attorney, you probably hate doing it.
Yet, what other option is there? Attorneys have been billing hourly since the dawn of time and who are you to blow against the wind? Well, I’m here as a testament to the fact that you can get away from the billable hour, and it will change your law practice – and your life – for the better.
Here are 4 reasons you must rethink how to price your legal services and leave the antiquated hourly billing model behind:
1. Clients hate it
You want happy clients, don’t you? You want them to refer you to their friends and family members. You want them to leave you glowing reviews on Google, AVVO, and social media. My experience has been that clients who don’t feel like they’re constantly receiving invoices are much much happier clients. They want to be able to ask you a question without having to worry about getting an invoice. They want to be able to give you a quick update and not worry that the meter is ticking.
Simply put, hourly billing is not client-friendly and does not serve to build trust in your relationship with your clients. If you figure out the average amount of time you put into a specific type of case, you can figure out what an appropriate flat fee would be for that type of case. For you litigators who are thinking “there’s no way I could do that” – you can bill flat fees for stages of the case.
2. It slows you down
You already know this. When you have to stop, calculate the amount of time you spent on a specific task, and write it down, it takes time. It interrupts you when you’re trying to get into another file to keep working. These small interruptions result in a huge decrease in productivity when you look at it over a day. Assuming you touch ten cases per day, you are spending approximately 30 minutes of your day keeping track your billable hours.
This means you’re getting home a half-hour later, spending less time doing the things you enjoy with the people you love. And that’s at only ten cases per day. Chances are that you work on a lot more than ten. And you wonder why you spend so much time at the office? Billable hours are likely part of that reason.
3. It limits what you can earn
It goes without saying that there are only so many hours in a day, week, or year – so when billing hourly, there will always be a cap to the income you can earn. And on top of that, any failure to track and properly record time spent on each case you touch can result in lost time and income.
4. You hate it, too
Let’s be honest – no one would keep track of their time like this if they didn’t have to. It slows you down, it stresses you out, and chances are, you are working way, way too much.
Fortunately, there’s a growing group of attorneys who are moving away from the billable hour and we’ve been proving that this works for well over 10 years . . .
New Law Business Model has put an end to lawyers charging clients for time, instead, clients are paying for the value of the outcomes of the services provided.
We teach lawyers to provide estate planning and strategic business counsel in a new way, and how to price and package those legal services so that families and/or business owners will happily pay between $3,000 – $5,000 per estate plan – or $2,500 upfront and then $750 – $3,000 per month for strategic business counsel services.
For example, an NLBM-trained lawyer might offer a subscription set of services for their business clients such as document review, monitoring IP, letters and consultations, and ongoing monitoring of a client’s business matters for $1,000/month. And when situations arise that are beyond that scope of services, the lawyer can charge an additional fee, and they would already have much of the information they need to get straight to work for their client.
It’s time to look at how to price your legal services in a way that truly works for you, and your clients.
For more info on how to price your legal services, be sure to read parts 2 and 3 of this blog series, where we’ll take a look at when flat fee legal services are even worse than hourly billing for your law practice, as well as the hidden risk when providing subscription legal services.
Are you ready to discover how you can start creating a practice that works for you and your clients, and gets you paid fees that allow you to deliver a truly meaningful service? Use this link to schedule a call to speak with a Law Business Advisor today and get clear on how quickly we can have you earning $3,000 – $5,000 per estate plan or $750 – $3,000 per month per business client using our model.