It's a common belief that becoming a lawyer is a guaranteed ticket to financial security.
But the reality is that most lawyers that run their own practice aren't even clearing 100k a year in take home pay.
Maybe you pursued a career in law because you wanted to do good in the world while also being able to provide for yourself and your family.
You did the work and took all the right steps you were told would lead to success. But now you're working too many hours and still unable to bring in the money you had hoped for when you decided to become a lawyer.
Right now, you might be asking yourself…
How can I make more money in my law practice?
Many attorneys believe that if they want to make more money, they have to work more hours.
It's easy to make that assumption when so many firms live and die by the billable hour.
But what if there was a better way?
Changing the fee structure for your legal services will often make a bigger impact on your growth and happiness than working more hours. How you price and package your legal services can make or break your firm.
Does that mean you should ditch the billable hour model?
How the billable hour is limiting your growth and your happiness
There are only twenty-four hours in a day, and no one wants to spend all of them working. Every hour you spend working is an hour taken away from doing something else that's important to you, like spending time with family, pursuing your hobbies, or resting and rejuvenating.
Time is a limited resource, and if you tie your income to your time, your income will be limited too.
In addition to there being a cap on how many hours you can bill, tracking your billable hours takes time and energy away from actually doing billable work. Do you see how billing hourly eats away your income?
Also, It's stressful to calculate and record what you're doing every one-sixth of the hour. And even worse, if you accidentally miss something, you're leaving money on the table.
And not only is charging by the hour limiting your growth and your happiness—clients hate it.
When a client has to worry about getting an invoice for every question, phone call, and email, this erodes communication and trust between you and your client. Instead of focusing on the value you provide, they're focusing on how much you're costing them.
Considering that the billable hours model caps your income and happiness—and it makes your clients focus on your cost instead of your value, it's clear that it's time to ditch the billable hours model.
So, are charging flat fees the answer?
Once lawyers realize how much billing by the hour is hurting them, they're eager to switch to charging flat fees.
But the problem is when first starting out with a flat fee model, most lawyers charge too little. The reason many lawyers charge too little is that they want their legal services to be accessible to their community. And they want to be affordable enough to compete with other lawyers. Some lawyers also think they need to compete with DIY options like LegalZoom.
It's easy to see why so many lawyers are tempted to charge flat fees that are too low, but the truth is when you undercharge, you are hurting yourself and your clients.
Flat fees that are too low are actually worse than hourly fees.
When you don't charge enough, you have to take on too many clients and work too many hours for too little pay. You're overworked, stressed, and worried about how to cover the bills.
In this situation, it's impossible to provide a meaningful service.
Instead, you're forced to have as little contact as possible with each client. And instead of being an advisor or counselor, you're in the position of selling documents—documents that don't get updated and fail to accomplish the goals that the client intended.
Now you have done a disservice to yourself and your clients.
I've experienced how costly it can be to be the recipient of ineffective estate planning. Before my father-in-law died, he got all the documents he thought he needed to keep his family out of court with his ex-wife. But the documents were never updated, and when he passed away (you probably already guessed it), we were stuck in expensive litigation with his ex-wife.
Unfortunately, my family's experience after my father-in-law's death was common for many families. But it doesn't have to be that way for your clients.
If you want to grow a practice that allows you to serve clients in a meaningful way, provide for your family and love your work, it's important to charge enough for your time and the guidance and expertise you provide.
How will I find enough clients willing to pay if I raise my rates?
If you provide a service that helps your clients save money, avoid conflict, and give them peace of mind, they will happily pay premium fees.
You can charge clients enough to build a practice you love while still being your client's most affordable option to accomplish their goals. This is what we at NLBM call charging "affordable premium fees."
Our member lawyers easily engage 80-100% of the clients they meet with without undercharging.
The secret is the client acquisition process we teach. We show our lawyers how to replace "free consultations" with an education-based working meeting called a Family Wealth Planning Session™ or a Life and Legacy Planning Session™.
Clients must invest in the process to book a session with you. We recommend our lawyers charge $750 for a planning session and give their clients options to get the session free in exchange for doing the pre-session homework.
During the session, you will help your clients get clear on their wealth and planning goals and show them how you can help them achieve their desired outcomes. With our pricing model, you help your clients choose the fee that's best for them based on their budget for planning and the outcomes and level of support they want.
Now you know the pricing model and client acquisition process that allows our lawyers to charge enough to build a practice and life they love and engage as many clients as they can handle.
To get your questions answered about how the NLBM program will support you with pricing and packaging your legal services, you can schedule a complimentary call with one of our Law Business Advisors here.