By Ally Kennedy, Founder of Amiga
Are you earning enough money with your flat fees? It is likely that you are not. I had a conversation with a consultant for lawyers who said that in 25 years of working one on one with attorneys, she only met one who was charging an appropriate flat fee.
However, flat fees are arguably the best way to do business. In the E Myth Attorney, they make a strong case for all attorneys to use flat fees. It helps set client expectations, allows for cash infusion into your business, and takes a lot of guesswork out of billing. Additionally many attorneys do not accurately track their time, meaning billable time does not get recorded and thus work is done for free. The same is true for flat fees if you are not charging the right amount.
Here are a few tips for making a flat fee work for you and your practice:
1. Increase your prices
The MAJOR misstep in flat fee pricing is not charging enough. I know this from my own personal experiences and also from working with attorneys one on one. The flat fee often does not even come close to covering our work. We negotiate against ourselves and lower our set prices in the moment.
Review all of your pricing and see where you can increase the price to more accurately reflect the time it takes to work on that case type. It often is difficult for us to raise our fees because we are afraid clients won't pay it or that they can't afford it. Start slow and add even $100 at a time. Calendar a time in 2 months to review your pricing again.
2. Don't forget the client
We often estimate the time that it will take to complete the legal work on the case, including preparing applications and forms, gathering and preparing evidence, writing briefs and legal arguments, and more. However there is something major that is missing from this estimate: the human factor.
Usually our flat fee price does not take into account the client communications that are a huge part of the case. That includes clients who want to call to check in every week, clients who show up without notice, clients who don't give you the evidence and you have to hound them for it. Even when the client is an easy client, there is still a lot of communication that goes on outside of case preparation. Your fees should be adjusted accordingly.
3. Create a Price List
A price list is a tool that will help hold you accountable to your pricing. This is for your internal use only, not for the clients. However it is a point of reference for you to use when you go into a consultation or quote a price. It helps you to not negotiate against yourself and your fee.
Remember: the work that you do is important. You are exchanging value for value. Your clients are investing in life changing services and you are providing them with excellent work product.
4. Bill, bill, bill
Flat fees are often paid on payment plans, and payment plans need to be billed. For some reason billing sounds easier than it actually is. However it is necessary to send bills to your clients. I have learned: you send bills, you get paid. You don't send bills, you don't get paid. It's that simple.
What tips do you have to make flat fees work for you?
About your Ally in Life, Business and Law:
Alexandra "Ally" Kennedy is a national award-winning attorney and the founder of AMIGA Lawyers and Alexandra Kennedy Immigration Law.. After becoming a mother, and in a matter of 3 months, Ally transformed her practice from earning in pesos to earning 6-figures and she is passionate about teaching attorneys how they can do the same. Ally empowers lawyers to be the CEOs of their law firms with her weekly blog, webinars, and conferences where she teaches step-by-step how to do the work they love while running a profitable legal business. Ally lives outside of Seattle with her partner and their 5 children.