There are steps you can take to make more money at your law firm. If you feel like you’re not being compensated as much as you deserve, or if you’re just going through a slow period, it’s time to take action. These easy yet effective steps can boost your firm’s bottom line and improve the way you run your law practice.
Stop Undervaluing Your Services
One of the biggest mistakes that lawyers make is charging too little for their services. Yes, building client relationships is important, but undervaluing what you do can lead to problems aside from income loss. First, valuing your services appropriately proves that your firm is at the top of its game. Clients may appreciate lower prices, but they may start to wonder if paying a different lawyer a higher rate would yield better results. Some clients may not even be willing to use your services simply because of the low rate. Even if you provide the highest quality representation, charging too little for your services makes you seem like a discount lawyer.
Try Flat-Fee Billing
Charging your clients by the hour isn’t always the most lucrative approach. Budget-minded clients may be inclined to stay for the bare minimum amount of time in order to save money. Not only does this hurt your income, it also makes your sessions less effective. You don’t want to feel rushed, and you don’t want your client to miss out on pertinent information. Try implementing a flat-fee policy for your services. You may find you generate more money while providing thorough and relaxed sessions. If you find you prefer billing clients by the hour, track the time accurately so there is no confusion when it’s time for your clients to cut a check.
Collect Outstanding Debts
One of the easiest ways to make more money is to collect what is already owed to you. As long as you keep organized records, this should be a fast and easy way to generate income. Go through your records, and pull out your outstanding invoices. You may not want to send them to a collections agency just yet, but sometimes a simple phone call or email can go a long way. Some clients may just need a simple reminder that they have an overdue balance.
Boost Your Realization Rate
Your realization rate is the difference between what you charged and what you’re actually paid. There are a number of reasons why your realization rate may fall short of 100 percent, including poor time management, inconsistent billing guidelines, not meeting your client’s expectations, and simply charging cost-sensitive clients less. Tightening those loose ends can lead to an improved realization rate, which can drastically boost your income.
Be More Selective
If a client doesn’t seem economically viable, it may be in your best interest to deny them your services. While you may want to help people in need, you’re running a business, not a charity. There’s nothing wrong with taking on passion projects, but don’t be surprised when your income dwindles.
Raise Your Rates
The easiest way to make more money is to simply raise your fees. If you’re exceptional at what you do, it may be time to give yourself a raise. Start by charging more in minor increments, and see how clients respond. As you gain experience and become known throughout your community, you deserve to be compensated accordingly. Research the rates of other lawyers in the area, and weigh the pros and cons of charging less or more. Sometimes a trial and error approach is the best way to figure out what works and what doesn’t.