There is a very good chance that you’re not charging enough for your services. By enough, I mean the amount your services are worth and what good clients would be willing and able to pay.
Why do I make this assumption? Because when I consult with lawyers and we talk about their fees, almost all of them are on the low side. That, plus recent surveys which show that two-thirds of solo lawyers earn a gross income of less than $200,000 per year and 28% earn less than $100,000 (again, gross income), tell me I’m right.
If you have been following me for awhile and have moved away from offering the same basic, “commodity” services most lawyers offer, in favor of higher-level, better-paying work, you’re offering more value and you should be paid for it.
How much more? Perhaps double or triple.
It’s exciting to think about doubling your income without doing anything more than increasing your fees. But you might be afraid to do it, thinking that most of your clients would leave.
Don’t let that fear stop you.
You can minimize the risk of a wholesale exodus by doing it over a period of years.
If you increased your fees 20% starting next year, yes, you might lose some clients. My guess is that it would far fewer than you imagine, perhaps very few or none at all, but if you do lose some clients, two things would happen:
- No matter how many clients you lose, if the rest of your clients pay you 20% more than they had been paying, your net revenue for the year would increase, and
- Any clients who leave would make room for new clients who will pay your higher rate.
If you increase your fees by 20% per year, in five years your income will double, not including compounding.
Too much? Too soon? Okay, start by charging new clients the higher rate. Once you’re comfortable with this, once you see clients are still signing up, you can begin phasing in higher rates for existing clients.
(For contingency fees, you can “raise your fees” by increasing the minimum size of the cases you accept.)
Look, I’ve seen lawyers (and accountants) who haven’t increased their fees in ten years. That’s not a professional practice, that’s a charity. You are entitled to charge what you’re worth and what the market will bear. You don’t have to settle for less.
How to ask for, and get higher fees