|
"For some
clients, opening your invoice is akin to a near-death experience."
|
One important purpose of marketing
is to show that your services are well-worth your fee. You want
prospective clients to conclude that you have such in-depth knowledge,
skill, judgment and experience that they would be foolish to
hire any lawyer other than you.
Whether someone hires your services boils down to the value/price
equation, which says: A prospective client will hire your services
as long as she believes that the value she receives from you
is (1) greater than the price she pays, and (2) greater than
the value she would receive from another lawyer for the same
price.
Value is not a fact; it's a perception. If your client thinks
he's getting value from you, he is. If he thinks he isn't, he
isn't. Truth and fact have nothing to do with value. It's all
in your client's mind. How your client perceives value can differ
greatly from how you perceive it.
When a client opens your invoice, her value/price radar is at
full alert. If she doesn't have a good idea of the amount you're
billing, she can do little more than hope for the best and prepare
for the worst.
You've heard people talk about near-death experiences, reporting
that their lives passed before their eyes. For some clients,
opening your invoice is akin to a near-death experience. As your
client slits opens the envelope, he replays in his mind all the
things you have done for him during the latest billing period.
As he nears the final number at the bottom of the page, he asks
himself one last time, "Is the amount I benefited from my
lawyer more or less than the amount I owe?"
You always want your client to feel that the value she receives
from you is greater than the price she pays. Part of how your
client perceives your value -- and responds to your invoice --
is based on how you bill.
Here are 11 ways to turn your billing policies into a competitive
advantage:
1. WHEN POSSIBLE, offer your client his choice of fee
and billing options. Clients often believe your fee is one area
that is completely beyond their control. When you allow clients
to choose the way you calculate your fee, they are usually happier
and more comfortable with the outcome because they took part
in making the decision.
2. SHOW YOUR CLIENT what your fee could be under the various
methods you offer. Then help your client see which method benefits
her most. The more you explain your fee and your client's options,
the more your client sees that you are trying to help her make
the decision that suits her best.
3. PROVIDE A DETAILED DESCRIPTION of the services you
performed by each entry on your invoice. A direct relationship
exists between detail and credibility. The more facts you include
that describe what you did, the more credibility you give to
your invoice. In the alternative, the less information you provide,
the less credibility your bill has, which increases your client's
skepticism.
4. DON'T CHARGE FOR EVERYTHING you do. Your client
really likes to see "N/Cs" on your invoice. They may
reflect a quick email response or a quick question you answered
on the phone. Whatever task you performed, the N/C helps balance
the figures that appear for the more time-consuming services.
5. BILL FOR IN-OFFICE INCIDENTALS only when your client
exceeds her monthly allowance. Charging clients for what they
believe is routine office overhead always results in bad feelings.
Specifically, clients see photocopies as the flag bearers of
inflated charges. While many clients won't raise the issue --
for fear of being labeled cheap or unfair -- copies are usually
a sore point because nearly everyone knows what photocopies cost.
When your client sees a bill for photocopying, he thinks:
"At my down-the-street copy place, I can make a self-serve
copy for five cents. Yet my lawyer charges me 50 cents per copy.
This is clearly unfair." It's the same complaint people
lodge against hospitals. "I can buy an aspirin at the store
for ten cents. But on my hospital bill the charge for one aspirin
is four dollars."
Here's the greater problem: When your client sees a charge that
he thinks is excessive, he can't help but think your other fees
and charges could be excessive as well. It's like when a lawyer
catches a witness in a lie. No matter how small the lie, it puts
that person's credibility in question.
If you ordinarily charge for incidentals, try this instead: Set
a monthly overhead allowance for each client based on the amount
of fees you expect to collect from that client. This allows you
to absorb routine overhead up to the maximum you set, without
having to foot the bill for excessive costs.
6. BILL FOR RAPID DELIVERY only when the fast service
is at your client's request and not the result of your tardiness.
A lawyer once charged me for a Federal Express shipment because
I told him I needed the documents in a hurry. The problem was,
he had promised the documents to me two weeks earlier and FedEx
would not have been necessary had the lawyer finished the work
on time. When I brought this to his secretary's attention, she
gladly removed the charge.
7. BILL OUTSIDE SERVICES at their actual cost.
I started this years ago and clients regularly mention how much
they appreciate it. I tell clients that when they hire me, they
have full access to my suppliers and business contacts at my
cost. I don't mark up any outside services. Since many marketing
and advertising consultants mark up outside services by 100 percent
or more, my at-cost policy adds value to my services.
8. PROOFREAD EVERY BILL. Clients expect that you
prepare your invoice with the same care and attention that you
use to perform legal services. A mistake on your invoice arouses
suspicion that you might also make mistakes in their documents.
In item #6 above, where my lawyer's delay resulted in FedEx charges
on my bill, my lawyer had actually billed me twice for the same
FedEx shipment on the same invoice. This lawyer was very smart,
but when I saw how little attention he paid to my bill, I could
not risk continuing to use his services.
9. ALWAYS DISCUSS FEES and charges in advance,
before prospects hire you. Fees are always a sensitive issue,
even if your client doesn't bring up the subject. Show every
prospect that you want to be up-front about fees and how you
bill. Start by explaining everything in advance. Give your prospect
a written schedule of fees and charges. State everything in a
positive, supportive way. Help your prospects see that hiring
you is a good business decision. How you charge should be one
of your strongest competitive advantages. If you find something
about your invoice or billing method that clients don't like
or don't understand, change it so clients see how your billing
practices work to their benefit.
10. ALWAYS DISCUSS POTENTIAL PROBLEMS in advance. If something
unforeseen happens -- or causes an unexpected increase in your
client's bill -- take a few moments to call and explain it to
your client. If you can offer your client different ways of handling
the matter, make that clear as well. The last place your client
wants a surprise is when she opens "the envelope."
If you think your client might perceive your invoice in a negative
way, call her and discuss it. Explain what you recommend. Ask
if your client agrees with your solution, or if she would like
you to review other options.
11. INVITE QUESTIONS about your invoices. Make sure prospects
and clients know that you are eager to explain anything on an
invoice they don't understand. Admit that you might make a mistake
and that you welcome the opportunity to review any invoice that
raises a question. If you don't willingly discuss fees, one day
you may find that your client leaves you without explanation.
And, truth be told, the reason may be because he thought you
always overcharged him -- or because he never understood your
invoices.
* * * * *
You can gain a competitive edge over other lawyers by (1)
calculating fees and charges in ways that favor your clients,
and (2) discussing those methods openly and in advance. Lawyers
who hesitate to discuss fees may discover that their clients
look elsewhere for legal services. But lawyers who discuss fees
and explain how they charge add value to their services and seize
yet another major competitive advantage. |
TREY RYDER has worked as a law firm marketing specialist
for 29 years, developing marketing programs from his office in
Payson, Arizona. To request additional free articles, send your
name and e-mail address to trey@treyryder.com
and ask for his articles. |
