If you bill by the hour, time literally is money. You get paid based on how many hours you work. If you offer flat fees, contingency fees, or anything other than hourly billing, however, time isn’t money. It’s just time.
When you bill by the hour, there are only four ways you can increase your income. You can raise your hourly fee. You can work more hours. You can lower your overhead. Or you can hire people to do some of the work and pay them less per hour than you bill your client.
Unless you use one or more of these methods, you can’t increase your income. Bringing in more clients won’t do it because there are only so many hours you can bill in a day.
If you want to earn more, instead of selling your time, you should be selling your advice or your problem-solving solutions. Not only will you earn more per client, the more clients you bring in, the more you will earn.
If you charge $400 per hour and bill out $2000 per day, you’re earning $10,000 per week, which is nothing to sneeze at. But you’ll never earn $30,000 per week.
I know it’s “hard” to come up with an alternative to hourly billing that protects you when you estimate too low or when contingencies occur, but it’s not impossible.
First, you need to stop thinking like a lawyer and start thinking like an entrepreneur. Instead of trying to eliminate risk, you will intelligently manage risk and use the law of averages to your advantage
If you take on twenty hourly-billed clients who each pay you $5000 to $20,000, or an average of $10,000, you take in $200,000 in gross fees. If you charge flat fees, however, and twenty clients each pay you $15,000, you gross $300,000. Now, if one or two of those twenty clients or cases wind up costing you more than you expected, even double what you expected, you’re still way ahead of the game.
I know I’ve said this many times before but I thought it was time for a reminder. Because time isn’t money. Unless it is.
How to earn more per client:Â hereÂ
