Tuesday, December 29, 2009

Heads or Tails #120 -- "Rate"

In this, the last Heads or Tails of the entire decade, Barb asks us to talk about "rate." Nothing is nearer and dearer to a lawyer's heart....

My hourly rate is what I theoretically charge clients for the performance of services.

I say theoretical because the stated rate may, in practice, vary from client to client. If I've done work for a person or company before and the bill has been paid promptly and in full I have little difficulty in agreeing to take on additional work from that client at a rate substantially lower than that which I quote to strangers.

For some clients, at the moment of crisis the lawyer is indispensable. Worth every penny charged. These clients are effusive in their praise and gratitude while the legal storm is raging. But then the storm subsides -- and the bill is presented. And then, for some reason, many clients suddenly feel quite differently about their once indispensable comrades. The bill is questioned, nitpicked, negotiated -- or, possibly, ignored altogether. Thus, the sadder but wiser lawyer learns to charge a high rate for his or her services and to get as much paid up front -- as a retainer -- as possible. (I've got the sadder part down... still working on the wiser part.)

I used to work in a firm. When I was an associate (a non-owner employee) my bosses (the partners) expected me to bill a certain number of hours ever day. If you can bill eight hours a day consistently, even in a firm, you're probably a liar. Or, perhaps, an insomniac. Maybe both. Clients balked at paying for proofreading or administrative tasks, such as setting up files or closing them out. Thirty years ago, we used to bill our time for billing. Those happy days ended long, long ago.

Preparing a useful abstract of a deposition for purposes of impeachment at trial might take longer than did the original deposition -- but clients wouldn't pay for that. And there are cases to read and clients to schmooze and other unavoidable interruptions in the regular business day. Time had to be found to supervise junior colleagues or meet on administrative matters. I found that I'd work 10 hours to bill about six, maybe seven. That was in a firm, with others to answer the phone, file the papers and type my dictation.

As a solo, I sometimes work 10 hours and bill two. If I can collect those two hours I at least cover my overhead. If I could bill (and collect!) four hours a day in my practice I'd be doing great. In 11 years, though, it hasn't happened yet.

I read in legal publications about lawyers who have billing rates of $1,000 an hour. I don't know any of these personally. These giants are at the biggest firms. But I'd bet that most of these follow the same rule I do. They may tell the National Law Journal that they charge $1,000 an hour, but for repeat clients with a good payment record, I'd guess most of these would charge a lot less.

2 comments:

Grandma said...

That's a real eye-opener. Although not very encouraging for those of limited means, who only need occasional legal services.

Skittles said...

Mostly what I know about lawyers and their rates comes from John Grisham books...

The new meme would be Show 'N Tell. I post a word and people show a picture or photo then tell about it. If I can bribe someone to help me code in new HoT themes I may keep it going a while longer. I guess I shouldn't say bribe to you though. Her rate is fairly low, though.