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Jan Copley
Certified Practice Advisor
Atticus, Inc.

530 South Lake Avenue, Suite 250
Pasadena, CA 91101
(626) 696-3145
(626) 421-6747 (fax)
jan@copleycoaching.com

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But Will You Make Money? – Part 3

March 23, 2012

Filed under: Pricing — @ 8:00 am

I think there are six rules you should consider when you quote prices to prospective clients. I wrote about the first three rules in my previous posting; here are the other three:

4. Present what you provide to give you pricing flexibility. Sometimes, we get caught in a rut in our services and prices. We may think a client needs to do something but the client may have different ideas and we don’t know how to respond. To give you some flexibility, you might think about the following for your pricing structure:

    a. Consider a range for the services you provide to serve both high-end and low-end client needs and allow the client to choose between the services;
    b. Consider adding new services to add to the choices you provide; but
    c. Remember that any innovation should be designed for growth of your practice and priced for profit; don’t add something that is just a loss leader.

5. Build your selling backbone. I think one reason attorneys have trouble with effectively pricing their services is because they’re scared of a client saying no. If that’s the case, consider (and practice) the following:

    a. Know the value of the services you provide (that is, the value to the client, not just how much time you think a project will take you);
    b. Learn a little about a potential client before you quote a price so you can explain what you provide in terms that are valuable to him or her; and
    c. Don’t negotiate your prices — if you do, you’ve lost all leverage for future dealings with that person.

6. Remember who you are. Although you may not think what you do is special, it is. It takes education and experience to effectively represent someone; you’re also taking on potential liability with everything you do! Therefore, price accordingly:

    a. Tactfully explain how you are better than your competitors and how you do more;
    b. Practice your explanation of what you do (your spouse will find it really interesting!); and
    c. Have justifiable pride in your services, because what lawyers do (e.g., save taxes, keep people out of jail) is extraordinary.

Please let me know how this helps you!

But Will You Make Money? – Part 2

March 21, 2012

Filed under: Pricing — @ 1:05 pm

In my previous blog, I wrote about some things to think about before setting your prices. Since pricing is crucial to the amount of money you make from your law practice, I thought I would continue the discussion in my next two postings.

I think there are six rules you should consider when you quote prices to prospective clients. I’ve derived the rules from R. Holden and M. Burton, Pricing With Confidence (Wiley 2008). The book is aimed at businesses that sell stuff, rather than services, but I think the six rules apply to pricing in every business.

1. Replace the discounting reflex with a little arrogance. Too often, we let our own frugality get in the way of setting our prices. Instead, to set a price that really reflects the value you are providing to a client, focus on:

    a. The client’s need;
    b. How you can solve the client’s problem; and
    c. Quantify the value for the client (e.g., “My charge to protect you from losing all your wealth to the cost of long-term care is about equal to the cost of one month of nursing home care”).

2. Understand the value you offer to your client. I think the best way to price your services is based upon the value you provide to a potential client. So how do you determine this? It’s not so hard:

    a. Find out (don’t assume) what worries the client;
    b. Explain the value in each choice you give to the client; and
    c. Allow the client to maintain control by giving the client choices (“How would you like to proceed?”).

3. Price to Increase Profits. Some attorneys lower their prices, thinking the potential for increased sales will make up for the revenue lost from the lower price. That may or may not be true. When you set your prices, consider the following:

    a. Increased sales don’t necessarily increase profits;
    b. Raising your prices is the quickest way to increase your profitability; and
    c. If you double your prices and lose half your clients, you will make the same amount of money — and probably have a higher profit ratio.

I’ll talk about three more rules in my next posting.

Please let me know how this helps you!

But Will You Make Money?

March 14, 2012

Filed under: Pricing — @ 5:44 pm

One of the things I talk about with my coaching clients is what they charge for their services. Almost always, I find myself urging my clients to raise their prices.

How not to set your prices. It seems most lawyers have not thought through their pricing structures — rather, they’ve set their prices based upon what someone down the street bills for their services. If you’ve followed this strategy, it means that if the person down the street is starving, you probably are, too.

Pricing is crucial. More than anything else, what you charge for your services affects how profitable your practice is. And, by “profitable,” I don’t mean generating enough revenue just to cover your expenses! To my mind, “profitable” means generating sufficient revenue to cover your expenses and take home enough money to enjoy a comfortable lifestyle.

Things to think about when you quote a price. When I read it, I thought Toby Brown’s article, “Wise up Before Value Billing” on the Attorney at Work blog contains good advice about setting prices. Although the article focuses on value billing, I think the advice applies to any situation in which you charge for the work you do for your clients. According to Brown, you should consider the following things when you set a price:

  • Know how sensitive the client is to the charge. If the client is too price-sensitive, the matter may not be worth your while.
  • Know how much the retention is going to cost you. Calculate the amount of time you will spend, how much you will have to pay your team for their services, your out-of-pocket costs, etc. Don’t just guess at this!
  • As yourself: is the case worth it? Do you like the case? Or will it keep you awake at night? Even if a potential retention includes a big retainer up front, it may not be profitable in the long run.

Please let me know how this helps you!

Rules to Market By

March 9, 2012

Filed under: Marketing — @ 2:17 pm

Most of the attorneys I talk to worry about marketing. We’re not sure what it is, much less how to do it. I spend a lot of time with my coaching clients brainstorming about how to generate more work in their practices. WealthCounsel had a webinar on marketing this week, featuring Mark Powers of Atticus. More than 1,000 people signed up!

So, when I saw the entry, “Denny’s 20 Marketing Maxims” on the Attorney at Work blog, I thought it would be useful to pass it along. I’m not sure I agree with all twenty rules, but the following struck me as hugely important:

    1. “Have a marketing plan and follow it.” Hit or miss efforts are seldom as successful as projects that are thought through and implemented.

    2. “Relationships and word-of-mouth are still the best forms of marketing and business development.” You can’t shortcut building relationships, and it takes a relationship for someone to feel comfortable enough to refer work to you. To market successfully, you have to get out and meet people.

Denny missed one very important maxim, however: never, ever, ever, ever stop marketing.

Please let me know how this helps you!