What’s It Worth to You?

Published July 24, 2012

Readers who have followed me on www.lawbizblog.com know of my ongoing billing problems with Verizon. The details aren’t important, but I was struck by two facts about them as they relate to legal practice:

  • Verizon outsources their collection issues rather than first seeking to resolve any questions internally. This may work for a communications oligopoly. But, for lawyers, unresolved billing issues could result in a malpractice action. It’s better to address the billing issue, resolve it and retain the goodwill of the client, not to mention the client’s future business.

  • Verizon does not give local managers authority to adjust bills – it can only be done by bucking the issue up the chain of command. This leaves the sour taste of a dispute with the customer long after it should be resolved.

Adjust Bills that are in Dispute to Match Value

Lawyers in their own practices can and should adjust bills that are in dispute in order to match value as seen by the client. One of my bedrock beliefs is that lawyers should charge for the value of the services they provide, and not an hourly rate like a day laborer. My billing for consulting and coaching is totally flat fee and project based. I started billing this way when I founded LawBiz Management Company in 1990, because I wanted to bill, not for the amount of time I worked, but for the value I gave my clients.

Give the Client the Power of the Pen

Part of my approach is that, once I negotiate the fee for a client engagement, I give up the power of the pen. In other words, once I send my bill to a client, any dissatisfaction on the client’s part is reason enough for them to write down the amount that I bill to what they think it’s worth. Of course, I hope this doesn’t happen and it rarely does. But the opportunity for them to exercise the power of the pen is always there.

“Value Adjustment Line” on Invoices

I have in the past mentioned The Summit Law Group in Seattle that provides clients with its “value adjustment line” on invoices: “We empower each of our customers with the right to adjust our billing, upward or downward, based on our customer’s perception of the value received, not ours.” Simply providing this as an option is perhaps the best reason why it likely will be used seldom if at all. And the real advantage is that it can proactively prevent a problem that no law firm wants to have – an unhappy client who refuses to pay.

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Audience type: Administrators, Associates, Large Law Firms, Small Law Firms, Sole Practitioners