It’s no secret that lawyers can be pretty bad with money management, and there are many reasons why.
“Let’s go back to the very beginning,” says Joyce Brafford of Profitsolv. “We know that law schools are very good at taking people’s money. But what about when the lawyers have to take people’s money?”
In this episode of the Non-Eventcast, Joyce and her co-host, Jared Correia, talk through three ways lawyers can improve their collections for the services they provide (10:41).
Check out their full discussion here.
No. 1: Maintain a Fee Schedule
A lawyer’s rate sheet should function like the sticker price for a car — it lists the fee for the services, along with the features of the services provided.
The rate sheet can help counteract many lawyers’ natural tendency for ad hoc billing, where they routinely discount their prices out of a desire to help their clients.
It’s a common pitfall, because so many lawyers got into the profession out of a desire to help people in need.
“Of course you should have a rate sheet,” Joyce says. “You don’t go anywhere in life where you expect to pay for something and someone doesn’t know what they’re charging you.”
No. 2: Charge Consultation Fees
Many lawyers who offer free consultations complain about being stood up, meaning that their time isn’t being valued.
But from a potential client’s perspective, a consultation is valuable in its own right, and there’s no reason it shouldn’t be billable, Jared notes. From the lawyer’s perspective, a paid consultation can also vet whether a client will readily pay for the services they’re receiving.
“If somebody is struggling to pay you a $200 consultation fee, it’s not a great sign for the representation,” Jared notes.
No. 3: Focus on Engagement Agreements
The engagement agreement — or fee agreement — is a valuable opportunity for lawyers to lay out their fee structure as well as the scope of the representation and overall client relationship.
Many lawyers miss opportunities to talk about additional requirements of the relationship at this stage.
What technology will be used? Does the law firm use AI? How will communication occur? Is there a collection process?
“Is it cool to text me at 2 a.m. and to expect a response?” Jared says.
“The engagement agreement should be about setting expectations for the relationship. It’s a great opportunity to do that, and a lot of lawyers don’t use it.”
This is the ninth episode of the series, hosted in conjunction with our partner, ProfitSolv.
This episode is sponsored by TimeSolv.