Survive Downturn by Rethinking Rates, Billing and Work Delegation, Experts Say
In a climate where there’s lower demand for legal services, lawyers who want to increase revenue ought to think twice about thinking just in terms of numbers.
Indeed, experts say increasing office hours or increasing hourly rates probably won’t work.
Increasing hours, of course, can only be a solution if there is work to do, Joseph B. Altonji, a Chicago-based consultant with Hildebrandt, tells the Wisconsin Law Journal. And Altonji doesn’t recommend increasing rates right now unless lawyers are in a specialty presently in high demand, like bankruptcy.
And if lawyers are providing personal legal services at a small firm, most clients probably think the hourly rate is already high, says Venice, Calif.-based consultant Ed Poll.
Arthur G. Greene, a Bedford, N.H.-based law firm consultant, notes clients’ wariness of having their cases staffed with newbie associates. He suggests staffing more cases with capable paralegals instead when possible, and billing clients accordingly.
Both Altonji and Greene also recommend experimenting with alternative billing, because clients find these arrangements attractive. “You’ll lose your shirt on some matters, but you’ll make money on others,” Altonji says.
Greene makes an example of Summit Law Group in Seattle, which uses a “value-based system.” The bill reflects a flat-fee estimate for the matter followed by a value adjustment line, much like the tip line on a restaurant check. “We empower each of our customers with the right to adjust our billing, upward or downward, based on our customer’s perception of the value received, not ours,” Summit says on its website.
Other thoughts from the experts? Spend downtime on marketing efforts, reduce expenses, and “fire” clients who aren’t paying.
Hat tip: Practical Paralegalism
