When starting your solo practice, figuring out how to price your services can be very difficult. Many new lawyers undercut the market or undervalue what they have to offer. Additionally, in this emerging market of flat fees, they have to consider their strategy for setting legal rates. When charging for hourly legal services, what should be the lowest starting rate? How should a solo lawyer structure a system for flat fee pricing? What are the signs of undercharging and how should attorneys convey the value of their services to the client?
On this episode of New Solo, Adriana Linares interviews attorney Ted Waggoner about how lawyers should set their fees, hourly versus flat fee pricing, and educating clients about the true value of their legal services. When starting a new practice, Waggoner explains, lawyers should set their fees based on expenses, investment, the client's budget, and, of course, profit. Each attorney will adjust these fees based on mistakes and experience. However, Waggoner also encourages lawyers to think like business people; have a discussion with the client about how valuable the legal services are and set fees accordingly. Lawyers need to establish a relationship with their clients in order to manage their expectations, educate them about value and benefits, and scope out the case. Waggoner also emphasizes the importance of research through blogs or consultants such as David Maister, Alan Weiss, and Ron Baker. In the end, he says, the fees are set to what the client wants to pay and is willing to pay, and whether the lawyer accepts that amount.
Ted A. Waggoner is the managing partner at Peterson Waggoner and Perkins, LLP in Rochester, Indiana. Waggoner has been an active presenter for lawyers Continuing Legal Education seminars, having lectured at the Solo and Small Firm Conference on topics such as Fundamentals of Successful Solo and Small Firm Practice; Tough Moments with Clients; and Selling Your Client's Business. Waggoner has also contributed to articles in the ABA Journal and other ABA publications.
Special thanks to our sponsor, Solo Practice University.