"Have conversations with clients about pricing, versus rates. At the end of the year, or end of a case, what really matters to a client is the fee. How much did the case or deal cost them? Your rate could be $10 per hour, but if you took 100’s of hours to complete a task, the fee is going to be high. A challenge here is that clients tend to compare pricing on a rate level, instead of a fee level. Use the price conversation to help the client shift their thinking towards fees. In the long-run this will greatly benefit them and solidify your relationship with them."And, he's right. What really counts is the final bill for services. The hourly rate is just a benchmark on the way to the final fee. Lawyers with a niche specialty can charge a higher rate because the depth and breadth of their expertise will justify the final fee. There is no profession (except, perhaps medicine) where the final result justifies the price of services so much as the legal profession. If an attorney can obtain the right result in a complex case with a minimum of effort the fee, if not totally out of line, is secondary. The result justifies the fee.
Monday, October 24, 2011
Fee vs. Hourly Rate
A recent post by Toby Brown in 3 Geeks and a Law Blog - When Raising Rates - discusses the difference between increasing hourly rates and the final fee for the work performed. Brown says: