Kevin Hochin at www.lawyerist.com wrote an interesting article that should be read by every lawyer who wants to be set free from the tyranny of hourly billing.
Say what?
Isn’t hourly billing the best deal going? Just calculate the hours, multiply the rate, then send the bill. Right?
Perhaps you’ve not yet realized the major pitfalls of hourly billing just yet.
Perhaps you’ve not yet realized that with hourly billing the only way for you to make more money is to work more hours.
Perhaps you’ve not yet realized the value in a client who doesn’t cringe when they get a letter from you and ask themselves, “Wonder what that cost me?”
I long ago discover all three of the issues noted above (and others) so I’m moving toward a non-hourly arrangement with clients when reasonable.
Obviously, it’s hard to do significant litigation on a non-hourly basis. However, I’ve heard of lawyers who use flat fee billing for specific tasks such as Court Appearance on Motion, Preparing Interrogatories, etc. That can work on a practice that is fairly systemizable such as divorces or estates.
Non-hourly billing works in many areas, limited only by (1) your desire to be unshackled from the hourly billing model we all learned in law school and (2) your creativity.
Here are a few ideas:
- Corporation Support Services: $150.00 per month on a 12 month contract. Do all minutes, meeting notices, annual reports and telephone consultation. No litigation included. Perhaps include 48 hr response email consults. This would work pretty well for your typical small business.
- Corporate Formation. Do a fixed fee, plus annual support. Could even couple with the Corporate Support Services package above with a discount on this package.
- Estate Service Package. Prepare the wills for husband and wife, with a 12th month review in the package. This gives you the opportunity to serve your client deeper.
- Homeowner Concern Package. For $50.00 per month, you look at any contracts that they are considering entering into. For example if they are going to remodel the house or take in a renter. Perhaps they are going to rent the house and want you on board to send demand letters to tenants (but not committed to filing suit).
Of course these are all just suggestions. The numbers may be too high or too low for your location. I throw them out just to give you something to think about.
You don’t have to jump off the cliff and go 100% non-hourly billing. Look at a specific practice area. The keys are (1) reasonable predictability of your costs; (2) ability to give and present value to the client; and (3) willingness to bear a portion of the risk that your clients are bearing by hiring you.
Please let me know what you think in the comments below.
Have you got any ideas on areas of the business that lend itself to non-hourly billing?
Are you implementing non-hourly billing in specific areas? How’s it working?
I’d love to hear from you.
Photo Credit: GenBug
I Hate McDonalds, But I Love Their Systems
You heard me right. I hate McDonalds. The food (not the fries) is mediocre at best. The seats are hard. The floors area always in need of a good cleaning (morning or night, it doesn’t matter).
So why the rant? Why am I knocking the golden arches?
Yesterday my wife called and asked me out to lunch. I’ve been married over 35 years, so I love a quick lunch with a beautiful blonde (that’s my wife). What I didn’t know is (1) she had both of my grandsons (ages 1 and 3); and (2) she was taking me to McDonalds.
Ouch!
Now I’m all for going to lunch with 3 of my most favorite people in the world. I’m so excited to do it, I even said yes after she identified the restaurant [sic] we were going to.
However, when we got there I remembered why I hate McDonalds. The burger was mediocre. The seats were hard. The floors needed cleaning. (Have I already said that?)
BUT, I love their systems. This is why I’m talking about this today.
When I arrived, the person assigned (notice the first key to their system) to great me at the counter promptly step toward the register.
He then asked a questions buying customers long to hear, “What can I get for you?”
He listened carefully to my order (as if he’d been trained to do so).
If he needed clarification he asked (in an interested sort of way).
He then asked, “Will there be anything else?”
He then repeated my order to me.
Look, this is real simple as I’m repeating it back to you. No doubt you’ve experienced the same. Probably many times.
But here’s the key that you must understand. It happens every time, with every customer.
WHY?
The answer is that McDonalds has developed, tested, tweaked and refined a system for greeting the customer and inviting the order. They then train their employees on the system. Then they evaluate them based upon their use of the system.
So what does this do for McDonalds?
1. It enhances consistency.
2. It allows for interchangeability of employees.
3. It makes training easier because its not haphazard.
4. It creates and reinforces certainty for the customer, thereby building trust.
5. It permits McDonalds to hire lower paid staff which increases their bottom line.
Now, how does this apply to your law practice?
Ask yourself the following question: What occurs in my office that is repeated with a high degree of frequency, that if completed in a predicable, consistent manner, would increase the value and profits of my business?
So what did you come up with?
Whatever it is can probably be developed into a system that is documentable, trainable, and repeatable. For example, do you have a system designed and documented to:
(1) Attract prospects
(2) To convert prospects to clients
(3) To provide service to the clients
(4) To get paid for helping clients
(5) To follow up with clients
(6) To obtain referrals from clients and others
Within each of these “systems” you’ll likely have sub-systems. All of the systems have the same characteristics. They are designed so that they can be documented, tested, tweaked, and repeated to achieve a re-occurring event in your business.
If you’ve not created these systems, now is the time to begin thinking about it.
Let me hear your thoughts in the comments below.
What was the hardest system for you to design and implement?
Photo Credit: Dylan Kereluk
While reading a post over at the Solo University site I came across a link to a CLE Agregator that I think you’ll find useful.
Some of it may be available online if that suits you.
Take a look and bookmark the site for later reference if you find it useful. Here’s the link to the CLE Agregator.
In a few days we’ll close the books on July. I encouraged you to take some time at the end of June to evaluate the first six months of your year. I suggested that you ponder these three questions:
- How effective have my marketing efforts been?
- Am I managing my receivables with an urgent perspective?
- Is my client service first rate or just average?
And finally,
- What do I need to do beginning July 1 and continuing throughout the year to accomplish my goals for 2010?
Did you take the time out of the business of your day a few weeks ago and ask yourself these questions?
If not, take some time TODAY and just do it.
It’s way too easy to get caught up in working in your law business and spend any time working on your law business. Be assured that December 31st is coming like a roaring lion.
Very soon we’ll be in the holidays and many will be asking themselves, “Where did the year go?” I don’t want that to be you.
- Be strategic.
- Be purposeful.
- Be successful.
Photo Credit: JoF
John Arnold posted a really good article on www.entrepreneur.com talking about the creation of successful online videos. As a lawyer you are no longer able to avoid the fact that online video is a huge draw for clients both present and future.
John demonstrated a pretty useful technique in inserting an automatic playing video as the introduction. It’s a little long for the introduction (1.40 minutes) but shows a variety of ways to use video, including inserting sponsored adds in the copy. You’ll notice that he’s inserted the video in a small screen which makes the file smaller and causes the video to load faster.
He gives 5 Tips:
- Quality Planning for every video. Since videos are not as easily edited as text you need to think about where you are going with your videos before you start. You know, “begin with the end in mind.”
- Quality Production can make or break your image (which I assume he means your brand). Now he recommends either buying high end equipment or renting a video production studio. For what most lawyers are going to use you’ll be a lot better off with (a) good lighting, (b) good audio (read that lapel microphone), and (c) interesting content. Get the video up and get lots of video up. Here’s a link to an example of what I’m doing in the bankruptcy arena.
- Quality Distribution is tip #3. It does no good to put the video up if it is not seen. He’s got some good recommendations for video syndication. Remember YouTube is the No. 2 search engine behind Google. I recommend www.tubemogul.com and personally use www.trafficgeyser.com for syndication service.
- Quality Interactivity (do you see a pattern here) is all about engaging the viewer. Youtube now allows links right in the video. John mentions allowing live chats which is a pretty interesting concept. I’d love to hear from you on how that is working for you if you are doing it.
- Quality Sharing addresses the concern that you need not try to create a “viral” video if your goal is to generate leads or immediate purchase. Not sure about this one. I think you’ll want everyone who might get a benefit from viewing your video to view it. Are you thinking of creating your video so it can go on mobile devices? You should be.
John has some pretty good tips and I recommend you take a look at the original article. As you are watching the introduction video, think about how you could use this on your website in places other than the welcome page. Understand that the tips provided in the article are applicable across the board including for lawyer videos.