Practice Management

A stranger stopped into an open church for a few minutes of quiet contemplation and found a wallet full of money in the pew in front of him.  Since no one else was in the church, the question popped into his mind - Was this a temptation of the devil, or the answer to a prayer?

And so I think is the question that most new Third Wavers ask themselves when a new client walks in the door as well.

Why?

I am not sure, but something seems to overcome them with guilt  and remorse, and as a result they fail to ask for or get paid the amount their services are worth or require.  They feel so privileged to have someone think of them, I guess, that they do not want to blow the chance to represent someone over the issue of money.  Maybe they feel sorry for the person.  I am not certain, but it makes little sense to starve you and your family out over some feeling that working alone or working out of your home does not deserve a good and decent life and living.

I get the opportunity to communicate with attorneys who are making this jump.  There is not a lot I can do, but I can sometimes offer some moral support.  Over the last couple of weeks, however, I have had three separate communications from three attorneys making the jump to a Third Wave practice in which they all retained their first client.  In all three cases the attorney charged the client substantially under the norm.  In each case, work for which more established attorneys charge thousands of dollars, they charged hundreds of dollars.

The reasons varied.  They felt relieved that someone wanted retain them.  They did not want to lose their first client.  They felt sorry for the person.  The excuse I do not understand is that all the other lawyers they visited with wanted a lot of money.  I really do not mean to be condescending, but DUH!!  Of course the other lawyers wanted a lot of money, because they know how to evaluate cases, they need to make a decent living, and the case is likely to take a whole bunch of time, talent and treasure that will take away from other potential clients and their families.

One case of which I refer was a Chapter 13 bankruptcy case.  One was a family law case in which their is a potential fight over the children. The other is a probate case.

What is it in us lawyers that make us feel guilty for charging good money for our services?

All of the arguments I have heard of late really fall into the category that I work from home, or I do not have the same overhead as the other lawyers, so I can charge less and take less.

WRONG!!!!!!!!!!!!!

Rule number one is NEVER, NEVER, NEVER, NEVER, NEVER, NEVER COMPETE ON PRICE!  It cheapens you and the profession.  You think you are doing good, but you will find you only have problem clients (who do not have a substantial stake in the litigation) and you have no money, you have debt and, hence, you have no life and not much happiness.

More importantly, however, is to keep in mind that whereas it is true that you do not have the overhead more traditional lawyers have, you also cannot handle the volume of cases that more traditional lawyers can handle to meet their overhead.  You can only represent so many quality clients.  It is fine to take a pro bono case every now and then, and you should.  But, if you crowd your docket with low paying, bad performing clients, who have nothing to lose in the fees you charge, you are going to find yourself homely, tired and ugly.  Who wants that?

I am not saying to be outrageous in your billing.  I am saying charge what the market requires.

Okay, you work from home or you work from a small office without staff.  Just how many $400, $600, $700 fees do you think you are going to have to collect each month to make ends meet and to make you feel safe and secure in your life.  You cannot handle that many cases as a solo without staff, and if you can you will only put out sloppy work, have mad clients, feel greatly overworked, and picked upon by life and the profession.  You will sour on law, blame everybody else, when the real culprit is that you could not summon up the courage or think highly enough of yourself and your abilities to charge a decent fee.

Do not do this.  Do not be a self-defeatist.  It is lunacy.  It is destructive.

Do yourself a favor.  Take out a sheet of paper and realistically write down how much money you want to make next year to provide for everything you reasonably want to do, including pay for your office. Then, continuing to be realistic, write down how many cases you can comfortably afford to take per month or per year to achieve this goal. Now, divide the number of cases into the amount you need to earn.  If you want to earn $150,000 a year, and you reasonably believe you can comfortably handle 50 such cases a year, then you know you need to be achieving $3,000.00 per case.

Now, in reality, you might make a little more or a little less per case, and there will be a few cases that will not work out for some reason and you will not get any money or much money.  The point is well taken, however.  Think of how many more cases you have to take to make up for the one on which you only took hundreds of dollars.  How much harder are you now going to have to work just to make up for that mistake, or how much is your family going to be made to suffer because of that mistake.

You need to start looking at your potential clients as an answer to your prayer and not as a temptation of the devil.