I want to educate you on why you need to start using flat fees at your firm right now. Many firms believe they should charge hourly because they feel it is a more accurate reflection of the work they do for their clients. We also see that often times, when a firm thinks a case is too complex, they don’t trust that a flat fee can account for all of their work.
However, many companies do effectively use flat fees. For example, construction companies. A construction company will look at a potential client’s project and give them a quote, or tell them how much it’s going to cost. If the project involves doing a whole home remodel, it is fairly difficult to give a quote on how much it will cost since there are a lot of factors to consider, but they will still give you an estimate.
That being said, a large majority of companies work with flat fees and still manage to estimate costs. If you are not charging flat fees, or you’re under-earning on your flat fees, it may be a good time to reassess how you calculate these fees. You need to really consider the number of hours that you put into a case, the amount of time, consideration, client communication, and everything in between. If you work on a similar type of case over and over, you should be able to accurately estimate the amount of time that it will take you to handle that type of case. Instead of handling those cases hourly and saying, “Well it could possibly be this much, but it could be less, or it could be more,” why not just give a solid price? Instead of second-guessing yourself, simply say, “That’s the price, and that’s what it’s going to be,” and there’s your flat fee.
You can still track your hours to ensure that you are charging the correct amount. Shortly, you’ll see a trend that indicates you need to charge more, or that you need to charge a bit less. But I’ll let you in on a secret, the problem with hourly billing is that it does not encourage efficiency, and efficiency should be the number one goal within your law firm.
If you can believe it, I have even more strategies and resources to share on this topic! If you’d like to learn more about Flat Fees, sign up for my monthly Six Figure Solo program. Every month you get a one hour webinar from me about a specific six-figure topic. Sign up here!