Have you felt stunted when it comes to the growth of your practice because there are only so many hours in the day? Do you have more conversations about time and billing than you want to? Are you tired of living your life in six-minute increments?
You are not alone. Many lawyers feel bogged down by the billable hour. We’re on this never-ending conveyor belt where our businesses are based on trading our time for money, leaving no room for growth and destroying our mental health. Even worse, we’re killing ourselves trying to sell something that clients aren’t even buying.
The truth is clients don’t buy our time. They buy the value they receive by finding a solution to their legal problem. So instead of trading time for money, we should be selling the value we provide the client by working with us. Selling value instead of time is a different approach than we’re used to in the legal profession, but it’s what every other business does, so why shouldn’t we make the shift too? What do we have to lose except the burden of the billable hour? If you’re ready to stop trading your time for money and unleash the growth potential of your firm, here are three steps to take.
Focus on Value
What do we mean by value? And how can law firms deliver it? While value comes in many forms, it is ultimately defined by the client and what’s important to them. Our job as lawyers is to understand what a particular client values and how we can deliver it.
When people seek out legal services, they are typically looking to do one or more of the following: solve a problem, manage risk, make a deal, right a wrong, or find peace of mind about a concern or worry they have. Clients come to us with the goal of achieving one or more of those ends as effectively and efficiently as possible. The value of our services will vary based on the degree of the problem they are trying to solve: from relatively routine to life-changing impact.
The same value will also look different to different clients. For example, creating an operating agreement for a client’s business is valuable to them because it reduces risk. Helping another client complete their bankruptcy case is valuable to them because it also reduces risk. Depending on how important the value of reducing risk is to the particular client, they will pay a different price.
While there are endless examples of how a law firm can provide good customer service, here are a few common examples:
- Reducing risk
- Offering a firm predictable fee
- Offering a payment plan
- Saving time
- Making the client money
- Saving the client money
- Offering more than one option
- Being transparent about the process
- Providing better results
- Connecting the client to another professional for a holistic approach
- Providing a streamlined process
- Peace of mind
- Feeling secure
- Protection from others
- Protecting privacy
- Reducing anxiety
- Prioritizing the client’s emergency
- Fulfilling the client’s dream
- Getting better results
- Providing the client with the opportunity to actively shape their future
- Changing the course of history for the better (e.g., impact litigation or launching a groundbreaking business or product)
Of course, this is not an exhaustive list. Think creatively and identify the unique value your practice provides. Be specific. Why do clients come to you for help? What value does the client receive by working with you? What differentiates you from other lawyers in a similar practice area?
Talk About The Problem You Solve, Not the Time You Spend
Once you’ve determined the value you offer, communicate it to potential clients during consultations and through all your marketing channels, including social media and your website.
Remember, no matter your practice area, you likely provide several different values to a single client so don’t feel like you have to come up with unique values for every different type of case or service. The trick is being able to identify and clearly communicate how a certain value specifically shows up for an individual client.
For example, a parent may come to you to help solve their custody issue. What they are buying is not the time you spend on their case but the value they receive, which likely includes providing information by explaining their rights, decreasing their anxiety, and providing access to defend their fundamental rights. Another client may come to you needing help with their criminal case. What they are buying is not the time you spend on their case but the value they receive, which also likely includes providing information by explaining their rights, decreasing their anxiety, and providing access to defend their fundamental rights – just in a different context.
A quick word of caution: when talking about the solutions you offer, do not guarantee results or use language that implies a certain outcome is likely. As always, all messaging should be accurate and truthful.
Set a Price Based on Your Value Not Your Time
It’s time to ditch the ego-centric way we price legal services. Instead of focusing on an hourly rate and how it compares to the lawyer down the street, we should be focused on the price the client assigns to the value we provide.
Think about it as a consumer. When you buy a cup of coffee, you don’t care how much time was spent creating that cup. You pay for the quality, convenience, and atmosphere at the shop (among other values). While providing legal services is a bit more complicated than creating a cup of coffee, the principle is the same.
Clients will only ever part with their hard-earned money when they agree the price is worth the value they will receive. When you don’t talk about the value you provide, how can a client decide whether the cost is worth it?
The only reason clients deal with the billable hour is because they have been forced to. We’ve created a false market that’s taken away their choice. Instead of comparing the price and value upfront, clients are doing it after the fact. They get billed and disagree that the value they received matches the price they’re being asked to pay. When the price doesn’t match the value, guess what? They won’t pay for it.
A better approach is to put a price on the value upfront so the client can make that determination before the representation begins. And guess what? When the client makes that determination up front and agrees the value is worth the price, they will also pay it upfront and not question it (assuming the value it actually delivered). That means no more defending or discounting your bills. No more living life in six-minute increments. No more capped growth. With value-based pricing, the sky’s the limit.
So there you have it, three steps to stop trading your time for money and instead focus on value. Selling value will grow your firm more than selling your time. And if you’re looking for some extra guidance on how to determine the value you provide or you just don’t know where to start on how to price that value, I would love to invite you to access our Pricing Toolkit. It’s totally FREE and gives you all the info you need to ditch the billable hour and profitably price your legal services based on value rather than time.
