When you’re first starting out as a solo attorney, it can be hard to figure out the right billing rate for your various services. While there are several billing rate methods to choose from, keep in mind that your prices should reflect that you are offering professional services. Here are some easy to use tips to help you set your billing rates.
Look at the Rates of Similar Attorneys
One of the best ways to find out if you’re on the right track with your rates is to consider what other attorneys charge. To do this, you’ll likely just have to ask other attorneys that you know. If you’re lucky, they’ll tell you. Keep in mind that they could be overcharging or undercharging for your services. However, this is still good research to perform.
Think about Your Overhead
Your billing rate must be enough to cover all of your expenses. This doesn’t just mean court fees that you incur for your clients. It means any office rent, utilities, insurance, your pay, and the pay of any professionals that you hire or contract. That includes your receptionist, your paralegal or legal assistant, your runner, your process server, court reporter, and expert witnesses. That’s not an entire list of expenses, but it’s a good start.
What Do You Want to Make Each Year?
In addition to your expenses, you must consider what you want to make each year. You can divide that amount by 12 because there are 12 months in a year. That will give you an idea of what you need to make each month. You can take that amount and divide it by four because there are four weeks in a month. Now you know what you need to make on a weekly basis. Then, you can divide it by the number of days you plan to work each week. That would tell you how much you need to make each day. Finally, divide that by the number of hours you want to work each day. That gives you a starting point. Remember that you need to add in all of your expenses over the course of a year.
You’re Providing Convenience and Expertise
Yes, you’re a legal professional and provide expertise. However, that’s not the only thing that you provide to your clients. You provide convenience by handling their legal, business, or tax matters on their behalf. You’re giving your clients an impressive benefit. This benefit should be reflected in your billing rate.
Test Your Billing Rates for Reasonableness
Both flat and hourly rates contribute to your bottom line. After you’ve set them, you can test their reasonableness. Can you meet the amount of hours that are needed to meet your goals? If not, you may need to re-examine your rates.
You Can Always Revise Your Rates in the Future
Your billing rates aren’t forever established when you first start out. You are free to revise your fee structure as long as you remember the ethics of doing so in your state. If you find yourself facing an ethics complaint because of your fee structure, contact Zavieh Law to schedule your 45-minute phone consultation. Zavieh Law focuses on defense strategies for lawyers facing these serious allegations. We provide both limited and full scope representation.