Because you're worth it
Vanessa Ugatti offers a simple formula to ensure lawyers are paid their worth in challenging times
What a year 2020 was. The beginning of a new year offers a good time to review the often-challenging subject of getting paid what you’re worth. So how can you make 2021 the year that you finally crack this?
Whether you’re running your own practice or an employed fee-earner, you are undoubtedly a highly intelligent, skilled individual who cares about what you do, often working long hours to satisfy your clients’ needs.
Like other professionals, you are not immune to the challenges which the business aspect of your work may pose; and with the ever-changing legal landscape, this may be even more complicated for lawyers than other professionals.
The turbulent situation, along with competition (much of which is a race to the bottom on price) and the perceived threat of artificial intelligence, may be enough to unsettle even the most commercially-minded lawyer.
For heart-led individuals working with clients who are going through particularly emotional times, or are seen as vulnerable in some way, it’s doubly difficult. Having those money conversations and managing clients’ expectations can be challenging.
So even though your charge out rate may be set at the correct level, you may not apply it properly; and automatically discount and over service clients because you just don’t have the heart (as you see it) to add insult to injury by billing the full fee. And in the case of fixed fees, you naturally underestimate.
Equally, areas which may be particularly price sensitive, such as wills or conveyancing, may also be tricky. So what is the impact of this?
Clearly there’s a financial impact on the firm’s bottom line, at times resulting in a significant loss of revenue year on year. However, there’s an equally important factor which cannot be overlooked –and that is the wellbeing of lawyers themselves. Not charging and managing clients effectively often leads to them working excessively and, quite understandably, being stressed, tired and overwhelmed.
As a consequence, the pricing issue may be a contributing factor to the increase in mental health issues within the profession. So what can be done about this?
Value is the key, the foundation, the heart of the problem and the solution. My unique formula UV + CV + CD explains this:
Understand your value (UV) – You must understand your value at a deep level, and from that profound understanding always focus on the value of each piece of work, before thinking about what to charge.
This then moves you away from the price being the key factor in whether or not a client will buy (which is erroneous thinking and just attracts the wrong sort of clients), to being value focused.
Although this is simple, it is not necessarily easy because the more experienced you are, the more you take your expertise for granted and think it’s easy. This is a significant part of the problem and process training alone is unlikely to fix this.
Communicate your value (CV) – Learn how to communicate your value to clients confidently, as well as being able to elicit the value perceived by the client. You also need to communicate clearly with the client throughout a project, from the outset to conclusion of billing and payment on:
- Costs, including changes to costs due to a variation in the scope of work.
- When the project will be complete and any variations to this.
- Payment terms.
- Any other relevant information, so that the client’s expectations are being managed. Therefore, the likelihood of discounting is significantly reduced, if not completely eliminated.
Confident delivery of fees to the client (CD) – If a lawyer is not confident talking about money, clients will pick up on this and may then challenge the fees.
In summary, this simple yet powerful formula, once mastered, will enable you to get paid what you’re worth.
Vanessa Ugatti is the author of True Worth, available at thetrueworthexpert.com