Price Should Be The Value to Your Client – Not Your Cost to Provide
Every once in a while an event happens so perfectly if you scripted it you couldn't have written it any better.
We hear lots of verbiage out there about alternative fees, fixed fees, value billing, value pricing, open pricing, call it what you will.
As Ron Baker says:
"Discounted and blended rates are just hourly billing in drag."
There are few concrete examples one can point to of a lawyer (specifically a solo) transitioning from the billable model and the concurrent fear the lawyer feels – 'I'm going to lose clients'.
This is the story of one of my clients. We met three years ago. He got so busy so fast he literally didn't have time to utilize my services fully so I can't take any credit for his launch other than encouraging him to do it. Three years later he calls me rather frantic because his expenses went up twenty-five percent to handle the increase in the volume of clients. But his gross revenues only went up ten percent. He knew there was something fundamentally wrong with his business model.
Background: Let's call the lawyer John. John left a small firm where he was the rainmaker in simple wills, trusts, disability trusts, conservatorships, etc. He realized he was making the firm way too much money and not being compensated for it. He wasn't sure if he could make it on his own so he hired me. He clearly was capable and opened his solo practice taking home $.75 of each dollar he brought in. Keeping overhead low was not an issue for him. His practice flourished and he eventually took on five part-time individuals, three virtual and two within his office. Practically all of his business is word-of-mouth. He started blogging almost immediately after he opened his practice. He enjoyed it immensely and created a personal hobby blog which also fed him more business then his practice blog! However, last week I get 'the call.' He doesn't know what he's doing wrong. His net income has dropped by a third but he's busier then ever.
John was trapped in a psychological mindset most lawyers are trapped in – selling their time rather than the value to the client. John priced his wills and all his services based upon his cost to produce rather than the value he imparted to the clients.
I shared the story of when my husband and I went to have our wills done, how I came to choose the lawyer, why I paid his fee and why it was worth it to us. I wasn't measuring his time to deliver the goods. I know full well he's done it a thousand times, would be a copy/paste by his paralegal. His value to me was in the counseling. I wanted the experience of his counsel and to know the end product I was receiving I could rely upon. If it wasn't good it would prove much more costly to me down the road. And based upon the above, I found this attorney's fees reasonable for what I was going to receive.
I paid three times MORE than John charged for the exact same thing. And I was paying the going rate! Now John is not stupid. John is frugal. But he didn't value his work beyond what he would be willing to pay. He was measuring the value of his work product based upon the time and cost for him to produce the end result as the sole criteria for pricing, not the end value to the client. He did not consider his efficiency and expertise or the value of his counseling. Nor did he value his reputation – 95% of his business is from word of mouth.
When we did the math, saw the number of clients he serviced and what he should be charging, John was leaving more than $100,000 on the table. That's right. And this was just for the simple mutual wills, POA, Health Care Directives portion of his practice which comprises sixty percent of his business.
We discussed what he should be charging and how he was the only obstacle to charging the right price (not premium pricing as some call it) because he had to digest the philosophy he was pricing to the client, not the cost to produce his services. It's not a perfect science. He has to feel his way around this.
Now, the thing about John, he's a willing pupil and a quick study. He wanted to put this philosophy to the test right away.
I had this consultation last Wednesday. The following day, Thursday, I get this e-mail from John:
Bless You!
Holy sh%$, it worked!
I just met with new clients who had stumbled onto my blog and they wanted a living trust package, which I normally charge $2,000 for. So, at the end of the meeting I gripped my legal pad very tightly and calmly informed them that the fee would be $4,000 (with the ongoing "tune-up" plan included, of course) and the husband immediately replied that that sounds reasonable and let's get started!
I've been smiling from ear-to-ear ever since! Thanks!!
P.S. This is an honest to goodness true story – unscripted 
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Great post Susan. So many times we try and get what the client will pay instead of pricing the value that we provide. This shows that alternate fees do not mean less money.
I 100% agree with this attitude. As long as there is some rational basis for the assignment of value (doesn’t have to be a “good” basis as far as I am concerned, just rational), then if the client agrees to the fee it should be considered a reasonable fee.
Story from my first client (not my only – I have a second I am waiting on the mail to return his agreement and a third nipping at my heels, trying to set up a meeting. Not bad for a first month in business for a brand new attorney): I was referrd these clients from my banker and they are forming a new business. My engagement is to form their business and I quoted them a low fee, thinking that these are my first clients and I don’t want to overshoot the mark and have them say no because they could get it done cheaply over the internet. . . . Well, at the end of the meeting, after they had signed up and we had discussed the nature of what I was going to do, they told me that they were surprised by how low a fee I had quoted them and they had expected a higher fee. I’m just beside myself, kicking myself in the rear to leaving money on the table like that. However, I do think that I will have more business from these guys in the future, so it may be a win-win situation in the end.
What I plan on doing in the future is setting what I feel is a reasonable price point for an experienced attorney and since I am a new attorney, discounting a set percentage based on that factor. If I lose a client because my assessment of value is too high, I will be engaging in the behavior I should have learned the first time from Ed Poll in the coaching session and cutting loose a potential client that will probably be a problem in the future.
Obviously, there is much more to our discussion and the philosophy behind pricing. And there are still those who believe their practice area is different. I’ll leave that discussion for Ron Baker who will show them otherwise.
If we sell time, we can’t manufacture more of it. All we can do is bring on more people who can sell their time for less than we can and then we tack a profit on that. It’s lunacy. And as we become more efficient in what we produce the cost to produce goes down, but our expertise increases. So do we charge the reduced cost for production or the increase value of our expertise? It is our value to the customer, not minutes we generate working on the matter. The timesheet truly must die in order for lawyers to truly profit.
Bill as you wish, but I think your premise is correct. The value is from the client’s perspective. I personally think the value should be the service and not the pricing, but they do go hand in hand.
I think the most direct way to frame the concept is: price to capture the value provided to the client through your services.
Easier said than done–it’s an art. Not an algorithm.
Wes, I like the way you phrased this: price to capture the value provided to your client through your service. This is the essence of value pricing. And when it comes to transparency of pricing, some are suggesting the term be ‘open pricing.’ It has a nice ring to it but is indicative of a different pricing concept relating to change orders and things of that nature – more along the lines of customized legal services where you can plan ahead of time the cost of possibilities in the litigation process, etc. Open pricing means complete transparency, no surprises. Of course, I’m not the expert on value pricing – Ron Baker is. There is much to learn on all of this. It is the future of legal fees and will greatly impact the lawyer/client relationship.
Not an algorithm is right, Wes. I don’t like it. The problem is price might not be right to capture the value, but I understand what you are saying.
By the way, how’s your practice coming along.
If price may not capture the value in a transaction such as this…what do you suggest would?
Chuck…forgot to include: my practice should be ready to go full speed come the first of the year.
I think decapitation fees work well in certain practice areas. I am not a big fan of them in terms of single shot litigation. It is really not an issue for me because I practice in the area of federal fee-shifting and private attorney general laws and it is not an option. I have to prove my fees up against financial institutions according to Lodestar. That is hourly. But, aside from this it is not an easy question, it is not an easy concept, and that is why Ron and others are in such demand. Most often what I see with new attorneys, especially, is that they are substantially under priced. With some attorneys, from an ethical standpoint, they are well overpriced for the services provided. I think that whatever anybody wants to do is fine, but the concern is when fees become fixed, they become a commodity, and when they become a commodity they decrease below what most of us would think is the value that needs to be received. That is the opposite of what anybody starts out to achieve and it happens because pricing is used as weapon or a slogan to achieve a competitive advantage. Sometimes this is a competitive factor, but most of the time it is just internal. Attorneys get in fight with themselves to get cases up on the board and get fearful that if they do not self-discount their services, they will fail in the case count they have set for themselves. That is a mistake no matter what the billing method or terminology contrived. I would rather calculate my earnings based on my time as opposed to how many cases I can throw up on the board because when you do that you find yourself discounting value as well. And, then the problem is that cases in many (not all but many) areas take on a life of their own. Too much is outside of the attorneys ability to control. I am not sure why the attorney needs to bear that risk or costs. But, it is no secret that companies and clients are pursuing decapitation fees because it is best for them. That might make it a marketing tool, but that does not mean that is best for the attorney. Client are pursuing it to cut their legal fees. This means they are seeking to pay the attorney less and make the attorney take on all of the risk. Then we call this a “value”. Cases then have a way of overcoming the time of the attorney without sufficient compensation. Most attorneys I visit with that are having money problems do not have a lack of work, unless they are just starting out. They have a lack of revenues. My solution is to stop trying to get paid for abstract things like “value” and quit trying to “capture” money or business, and, just work to get paid what you need to do what you want and need in life. I admit that I am a simple man with a simple view of things, but we don’t have to pretend that “value billing” is a sells tool that not always, but often, represent no true value for attorneys. Now, for that opinion, I know that Wes and others think I am a “socialist”, but that is my general opinion.
Chuck, as always your points are salient since they obviously are spoken from experience. I think the risks you point out are why I consider pricing to be an art. It takes a rational sense of egoism and a willingness to fight against inertia. It’s nobody’s fault for not being capable of fighting that fight and in many situations it doesn’t make sense.
But the point is that, even within a niche that practices fee shifting, there are ways to employ value pricing (or open pricing as Susan mentions above) to enhance the overall productivity of the profession. I agree that many lawyers struggle with underpricing their services, however, I don’t see that as a reason to stop thinking about variable pricing strategies.
Here’s one thing I’ve never understood about hourly pricing: it doesn’t seem to me that many lawyers are in the habit of pricing their time at different values when they are doing different tasks. You can’t tell me that answering a procedural question on the phone is worth the same as creating a novel legal argument that saves a case, even if you spend the same amount of time on each. It seems to me that too many lawyers bill both of those times the same out of…well, I don’t know why they do it.
And here’s the thing: if you can properly value your work based on time then go with it. But the foundational concept is the same regardless of the chosen system: pricing should, above all else, be thoughtful. It should not be rote. It should not be simple. Not even if there’s a formula to plug numbers into. A lawyer’s services are too diverse to follow a simple formula.
As always, appreciate hearing your stance on things.
Great post.
Wes, if you can figure out a different way to “value” fee-shifting cases that the courts of appeal and SCOTUS will accept that is more open and enhances the productivity of the profession, then be my guess. I am always open to such a thing.
As stated, I do not have a problem with the way you wish to charge for your services. You might be practicing in an area that requires such a thing, or you might wish to find it desirable. Power to you. You need to feel comfortable with your practice.
I am just a little taken back by the new speak of it all. We call it value pricing or billing or whatever, and lawyers think they are on to something new. It’s been around for time and eternity. You don’t want to keep time records. You want to charge a fixed fee, a global fee or bill by segments of work completed. I get it. But, do not assign new phrases and suggest it has some formula or benefit that is new. It is not. It is sales speak. It is for the benefit of consultants to sell services to lawyers and lawyers to try and differentiate themselves in marketing. From my perspective, I do not think that marketing based upon pricing is a good thing for the reason I described earlier. But, I am not the one in control of your practice. You are. For me, I do not see how you can judge the value of anything if you do not know you time in the case in relation to your other cases and the other segments of your practice, no matter how much you bill.
And, I take on these kind of billing practices myself sometimes. Back in October I took on the defense of a dischargeability case in bankruptcy. The debtor and I talk about the matter in depth. I have tried these matters to conclusions many times in my life. He was worried about fees and costs, only could come up with so much money. So, I took the case for a flat fee of $15,000.00. But, it is litigation. Who knows what is going to happen. I filed a motion to dismiss thinking if I could knock it out of the part early I really would be ahead. No dice. I managed to get the trustee to substitute in on one part of the claim that the judge agreed the creditor could not bring. The creditor kept the part of the claim the trustee could not bring, the complaint got bifurcated. Now, I have two cases I have got to try at different times, two sets of discovery, and in one of the new segregated cases we have been ordered to mediation. Now my agreement does say the client has to pay the cost of the mediator and the court reporters, but he now does not have any money. I would have to get permission to get out of the case and besides that would be abandoning someone that gave me every last dime and counted on me. I am now about $25,000 down in time and no end in sight. Now. my client certainly did get “value” billing. It was not a “value” for me. I could be spending my time on matters that are more profitable for me.
Having been there, all young lawyers go around thinking of billing system and methods in the abstract and dreaming of how to get the big lick. It rarely comes. In reality you make you living in small licks, and frankly I find it more enjoyable. But, I now know what works for me in real life and I spend very little time on this subject unless someone brings it up.
Now, if you are doing real estate or other transactional work, or you stand to have a large payday due to some contingency work, I think that’s great. At least there is an upside in the contingency work and a pretty fixed set of task in the transactional work.
Just save me the salesmanship. Get up in the morning. Go to work. Go find some good paying clients. Be happy. And, above all else stop thinking you are reinventing the wheel by developing new terms to describe your billing method. It is just simply not that complicated. The goal is networking and relationship building and finding clients. And, all some lawyers want to do is act like they are being strategic these things. Sure it takes a little forethought, but in the over all scope of things is small. You will try this and that and then figure out what works best for you. Most likely you will find out what does not work best for you in your line of work. But, I do not think you are going to figure it out in advance. To me, and my old country boy ways, it is putting the cart before the horse. In the long run my efforts are in getting people before me. I give them my time and listen carefully to what they need. I do not worry any longer in my life about looking them in the eye, telling them what I want, and if they can pay it fine, and if not I thank them and give them what advice I can. If they are good clients they have some final interest in your billing methods, but they have problems to solve and that is first and foremost on their minds.
To market billing concepts to potential clients does not say squat about the lawyer and the value he can add, in my humble opinion. Agreed nobody wants to be taken advantage of, but the imagery of price marketing has all of the imagery of Nick Riviera, M.D. on the Simpsons cartoon series. I just do not think it is attractive. And, frankly, consumers, especially, but companies and insurance companies and financial institutions that want lawyers such as this tend to be, in my experience, the worse kind of clients possible. They are looking to take advantage of someone. That someone can be the one that markets in this way.
So, as always, I will state again, it is not for me to tell anybody how to practice. To the degree you asked for my advice, I have provided it to you. It is free to you, so I guess it is “value pricing” in the best sense of the term.
Chuck, I understand exactly where you’re coming from and I wouldn’t begin to assume that any pricing concept is truly new because the profession has been around so long that it’s just about all been tried before.
All I’m saying is that pricing should be a more thoughtful process than “Hours x Rate = Fee”. I realize that in plenty of situations lawyers are constrained to that formula and in many other situations it simply makes the most sense, but even that formula invokes the vague concept of reasonableness. I think tracking time and using it as one input for pricing makes good business sense. But I also think clients aren’t merely buying time from lawyers and the strict billable hour model seems to presuppose that notion.
I think of pricing less as a marketing tool than as an ethical obligation to the client. The duty is to charge a fair and reasonable price for the services rendered. However that end can be achieved is fine with me.
Wes, that statement assumes that lawyers have come to the concept of judging fees and profitability of, as you say, “Hours x Rate = Fee”, thoughtlessly or in something more less than a fully thoughtless process. And, then to suggest that you or I or some other lawyer is somehow “constrained” by this is … well, come on. That is so teabag-ish. You are free to do what you want, as I am. Is it that other more established attorneys are doing something that you do not wish to do that you are “constrained”? I do not think so. And, it is this idea that many experts over many decades have determined, from many methods, some that are reasonable for everyone involved, that makes you suggest that those who might employ it as potentially unethical. Neither I, nor most courts, nor most professionals, believe that we or others that use Lodestar are thoughtless, constrained in what we want to do, unethical, or priced unreasonably.
What I know is this. You are not constrained and can bill in any fashion you want. You can call it anything you want. You can paint a picture of your practices in any way you want. Nobody, but nobody, is stopping you or getting in your way. But, when you paint it in terms of ethics and pit it against those who do not bill as you might do it, then it is only for marketing purposes. That is fine with me too because I do not believe you are constrained.
I just think you have a fraction of time to get in front of a client and sell them on you. If you decide that this is your point of differentiation that deserves that fraction, the question is are you going to be happy with the result.
I agree the talk of money and fees are not always pleasant with clients, and therefore you deal with this subject after you decide how and if you can help them. Otherwise, it is a bit like a plastic surgeon not first discussing the end result of a procedure and deciding to lead off with a description of the skin being sliced, the blood that is lost, the pain that is going to be experienced. The truth of the matter is that no client at no time much wants to hire a lawyer. When you make fees the issue, it is tantamount to discussing the painful surgical process before you have their attention of the good you can do them.
Every since we met at SPU you have had a fascination with fees. That is not bad. But, do you believe it is helping you to build your new practice as quickly and vibrantly as you want?
I brought in 5 new clients this week. Not bad for a solo Third Waver on the week before Christmas. And, I did it in between my court schedule. I did not do so having an academic discussion of fees.
Now success is relative, but is that the success you are experiencing right now in your practice?
The truth, as I see it, is that nobody wants to hire a lawyer. Those that hire lawyers do so because they need a problem solved. When your discussion is first and foremost fees, you are not selling them a solution their main problem. You are asking them to hire you for no better reason than you are a cheap attorney. And, if that is the commodity that is being sold, then they will most often go to the more experienced attorney. People with real problems want help they believe is competent. They perceive cheap attorneys often times as not competent. Or, to put it a better way, those that can afford a more competently perceived attorney will not hire you, leaving only those that can afford “value added ” fees. It is not that you lose out on clients. It is that you too often miss out on the best paying clients. Then you wonder why others in your area are doing better than you.
In Realtor parlance, if a house is quaint and cozy, it is really cramped and not functional. If it needs a little TLC, it is a wreck. If a person is negotiable they are desperate. People are naturally skeptical and judgmental of anything marketed. They see the opposite or something different in what you are saying. If something is “guaranteed” it is not. If it is “superior” it is not. If it is “the best” in their minds it is far from it. When you distract people from their main goal — solving a legal problem — they naturally think the opposite or worse. When you avoid their underlying problem to first present your unique fee structure, they are doubtful. When you say “value added” they think cheap. They might like cheap, but they do equate you with their image of the fee.
I would like for you not to be so taken by these issues, and more involved in developing a lot of great paying clients in your chosen field. If you are already there, that is great. Power on with the fees issues. If not, concentrate on that like a laser. It is more beneficial.
I have to agree with Chuck here. As the saying goes, “there is nothing new under the sun.”
Flat fees will certainly work well in certain areas: drafting a simple will, drafting a small business non-compete agreement etc. Some tasks are easily defined and the attorney knows how long it will take. It’s also a merketing gimic to a certain extent.
Litigation is not so simple. It is impossible to predict whether the issue will take the exchange of a few lawyers letters, a motion to dismiss or result in extensive discovery and lengthy scorched earth litigation.
Thank you.
Chuck, first what does “teabag-ish” mean?
Second, I only talked about lawyers being constrained in their mode of pricing because you brought up fee shifting and the requirements of the lodestar calculation. I agree that in those situations, given the current state of the law, pricing by the hour is the only option.
I never in any way suggested that someone who practices hourly billing is being unethical. I have no idea where you got that from. I simply said that for me, I view this issue as centering around our duty to charge a reasonable fee. I even explicitly said that ANY way a lawyer can decide on a reasonable fee is fine with me. I apologize if you’ve somehow been offended by my innocent comments.
Well, I think that teabaggers have a certain quality, generally speaking, of hyperbole. I think that is a good way to put it.
As to the other, I believe you said, “I think of pricing less as a marketing tool than as an ethical obligation”. The way I take took this, and I think it is correct, is that the so-called “value” pricing or billing is the ethical think to do. That would necessarily mean that Lodestar is not.
You might not have specified what fees ae reasonable and what fees are not reasonable, but you interjected the argument of reasonableness in your argument against Lodestar. You did it as a point of differentiation. This would assume, and I think you meant, that you do not believe that Lodestar is basically ethical or reasonable. First, you brought it up as the bases of your argument. Second, if Lodestar in your mind were reasonable and ethical, there would be no reason to have this discussion as Lodestar would be the right system to use for the exact reason that it is reasonable and ethical and that is the standard you applied.
As to the second point, I think in a litigation context, I think that Lodestar is the most ethical and reasonable solution. If a matter takes a hour, the client is charged only an hour. If it settles quickly the client gets the benefit. If it does not, the lawyer is not financing the fight. Once the lawyer is invested in the fight, then the lawyer loses his or her objectivity.
But, can you see what is happening here, Wes. I take your own words and put them in a different or opposite context in which you used them to establish a point. It is, I must admit, pretty good lawyering. That is what I get paid for — by the hour.
I am not really that opposed to what you are saying. If you are doing a real estate transaction, do fixed fee. If you are doing a will, do fixed fee. I do not think it works in single shot litigation, and if that is your route, I hope you do not follow it on a fixed fee basis. I also, think there are other priorities in the practice of law starting out other than the degree of attention on this issue. I also think it is too prone to salesmanship by those wanting to make money off the cause. Like my cause of not, enjoy my position or not, like my style of argument or not, want to follow it or not, rest assured I am not trying to make a dime for it or off of it. It is gratis to you, with no strings attached. I am more concerned for you and your burgeoning practice. I am happy you have allowed me the input in this regard and for his reason.
I hope all is well for you and yours, I wish you the best in your new practice, and my hope is that you have a wonderful holiday season, Wes.
Peace.
You’re killing me here Chuck. I feel like you might be projecting a little bit and making this discussion more contentious than it needs to be.
Where did I say that there was only one ethical way to bill? I brought up the concept of reasonableness merely to note its vague nature which actually implies that there can be an entire range of fee amounts that are reasonable in any given situation. And since reasonableness is only applied to the final amount, how you get to that amount is an entirely different story.
I have absolutely no idea how my assertion that some lawyers (in some situations) are constrained by the courts and have no choice but to use lodestar can be categorized as hyperbolic. It’s simply the truth. Perhaps what seems hyperbolic to you others view as merely a lack of denial about the truth.
Anyway. Like I said this whole thing has been blown out of proportion. As you said, this isn’t even the most important aspect of practicing law. Enjoy the holidays my friend and I hope all’s well with you and your fam!
Yes, we can agree on that.
Excellent discussion gentlemen! I know you two may not agree, but I feel highly enlightened on both points of view and will take them into consideration as I enter my third year of practice.
I think previous posters have already thoroughly discussed the pricing issue. It’s certainly not a one-size-fits-all situation. The important thing is to consider your clients–what do they consider fair and what are they willing to pay? I believe the majority of people are perfectly happy to spend more for a higher quality product or for a lawyer or firm they have more complete trust in. In fact, by valuing your services lower, or giving clients a discounted price, you may be creating the impression that your services are worth less.
I think that is exactly right.
My concern is not for the so-called concept of “value billing”, in whatever form that takes. Attorneys have a right, generally, to enter into any financial arrangement or terms they both believe works for them. My concern is the marketing ploy of the thing. The very terminology is used as the first bullet point for why a client should hire you over someone else. By default then, it becomes the only marketing ploy of new attorneys that do not have any other credentials to speak of that are not law school related.
That is advertising based upon fees, just like or no better than some lawyer that advertises uncontested divorces for $250.00. We know what kind of clients that kind of lawyer gets, and we know, if such lawyers are truthful, how impossible it is to make a living off $250.00 total fees.
So, a new attorneys do not want to appear this way, and they latch on to these new marketed terms people throw out, like “value billing”. It does have a new twist to it, but make no mistake the new attorneys are competing by marketing and cost competing on fees, instead of concentrating on how the legal services he or she provides can benefit potential clients. Denying it is just denying it to themselves because they do not want to hear it.
I generally do not think it hurts to market that the initial interview is free to allow both parties to determine the worth of each other with some comfort, but to say that “value billing” is not cost competing is not accurate.
My point is that attorneys that get fooled into competing on price in their upfront marketing will regret it. New attorneys already have a natural tendency to charge too little for services, convincing themselves it is the cost of breaking in. But, where does it stop? It generally does not stop. Then five or six years from now, as they are still squeaking by, they bemoan how piss poor they are, how the legal profession has not worked out for them, and seeking a solution.
Well, before the solution, which will then disrupt their practice, it is good to know the cause. The cause is price marketing in any form or any fashion. A few, and mind you it is just a few, will have the opposite effect of more often than not ripping people off for the work they do compared to the “value” billing” or “value pricing” they charged for that work. Either way it is not good.
I have nothing to gain in telling new attorneys this. I am not one of the gurus trying to make a buck of the concept. It is simply my unvarnished opinion based on my years of practice. They can take it or leave it. But, my druthers is that they spend less time playing around with this stuff starting out, and more time thinking of how to get paying clients (paying in whatever form) based on the services they provide.
Too often new lawyers want a quick and easy solution to obtaining clients. That is what this is about, and we need not make any mistake about it. In the long run, however, it is best to build a practice the old fashion way of getting out, meeting and greeting, and telling the world how your niche or practice area can help those in need. And, stay off the price or billing issue.
I wish I could read other people’s minds like Chuck (apparently) can.
Is it really fair to assume that value pricing is always about marketing? Is it impossible to imagine that there is a lawyer out there who simply thinks hourly billing is wrong?
Oh, and there are ways to incorporate value billing INTO hourly billing (see Valorem Law Group’s “Value Adjustment Line” as one example). There are also these neat little things called “change orders” that negate the “decapitation” aspect of any system that involves up-front pricing.
Wes, come on down and I’ll try to teach you mind reading. It’s really cool.
As I have said, you go ahead and bill the way you want, how you want and when you want to do it.
I am not quite sure what it is that gets your goat when I express my views about these ideas. I have my opinions as you have yours. I think it is helpful to readers to hear (or read rather) both of our views on the subject.
By the way, I do not thing it is impossible to imagine a lawyer that does not prefer to charge hourly. I have stated repeatedly that I have done it, I know people that do it successful, and that it is appropriate in a lot of different settings. I guess I just burst your bubble by not agreeing with you in every instance? Not sure. I have had some disagreement with you over your characterizations, and have said so, but I have not taken them too personally. Well, maybe except for the socialist remark, but then I thought you were probably employing your talent of hyperbole. But, here again, you say that hourly billing is “wrong”. Well, that means that people who employ it are wrong. You have indicated that it is not ethical. That would indicate to those that use it that we are unethical for employing it.
I guess, maybe, I have done a bit of the same here as well. So, I will give this subject a rest. Because in the final analysis, no matter what our disagreement on the subject, you know I’m proud of you passing the bar, starting a practice, and I wish you nothing but the best. It takes a lot for someone to get into law school, get through it, pass the bar and then get a firm off the ground, and I applaud you for it. I am just saying I would rather talk to you about that subject than fees.
Chuck, we all live these issues on a very personal basis so I think we also tend to take them seriously…maybe even a little too seriously (myself included). Thankfully the ethics rules of most states’ bar associations are broad enough to allow us each to find our own way, which is how it should be in any true profession.
We both have no issue speaking our mind and so we will inevitably butt heads sooner or later. I have no problem admitting that I’m a stubborn sonofagun. When I say that hourly billing may be wrong or somehow imply that it is unethical, that is strictly from my own point of view. I don’t proclaim to judge anyone else in life and so I should choose my words more carefully I suppose.
Good enough. Have a wonderful New Year holiday.