February 15, 2012
What's a "reasonable" fee for a new lawyer to charge?
New or soon-to-be grads thinking about opening their own office have to decide how much to charge their clients. The model ethical rules require that fees be "reasonable" in relation to the complexity of the matter and in light of the fees customarily charged by others for similar work. So how do you figure out what others charge for similar work? Since many colleagues, who might perceive you as the competition, will be reluctant to discuss their rates, consider this advice from the blog Attorney@Work.
One way to approach this question is to ask those who have owned their own firms for a few years what they wished they’d charged when they first opened their doors. You could also ask what they think is a fair price for someone of your education and experience.
You should also check with your state bar association to see if it has compiled data on attorney billing rates based on years of practice and practice area. The State Bar of Arizona, for example, puts out such a report every three years. It is a fantastic resource for billing information.
Get Your Clients’ Opinions
If you are particularly daring, you might borrow a page from Alex Bajwa’s playbook. For the entire month of May in 2011, he let his clients name their own price. Yep, that’s right: After he performed the agreed work for them, he allowed the clients to decide what they would pay. Bajwa asked his clients to consider three factors in setting the price:
- The value of the services
- The client’s satisfaction with the level of service and representation of the firm
- What the client could afford to pay
Bajwa said from the outset that he would accept whatever price his client picked, even if that number was zero. The experience provided him with valuable feedback about how clients perceived his firm and the value of his services. It was a wonderful way to publicize his firm and it gave him the data he needed to revise his fee schedule.
If you are not that bold, you might want to create a simple survey describing your services and asking what would be a fair price. You could send this to your clients, people who fit the profile of your ideal clients, and lawyers who work in the same practice area. This will give you some insight into the perceived value of your services.
I sent out such a survey recently because I want to offer some of my services on a flat-fee basis. The results revealed where my prospective clients see value in purchasing legal services. It also suggested that clients may need more education regarding the amount of work required to create customized documents, such as operating agreements for businesses.
Clients are happy to pay more and refer more business to you when they understand that you provide personalized care and service.
February 15, 2012 | Permalink