First Attorney-Client: Pricing your Work
Pricing client work, especially when you're first starting, can be challenging. Finding precisely the right amount to invoice, it's a finesse skill. It comes with practice. Give yourself some space because you win some and you lose some. We all make mistakes and pricing. The more we price, the better we get at this skill.
Here is a story to try to help place some context on this topic.
Underpricing Story
I have a client that I did a "hurried up" quote. It was around the middle of March when taxes were due, and I did not do my due diligence. I didn't review the file correctly. I under-priced the job. I put it in my calendar to reach out to her and let her know that the rate would triple.
I had underbid the work, and all I had managed to do was cover the software's cost. I'm serious here. Of course, the client became "that" client that needed a lot of assistance all the time. Every time she phoned or emailed, I disliked working on the file. Every time I did in her file, I was reminded of that mistake.
We had a contract, and I was obliged to fulfill it. When I wrote to the client to explain the increased pricing, she was astonished. How could I possibly raise the rate when she could barely afford the original pricing? We parted ways, and of course, she was a client that just kept coming back with questions hoping I would answer them. And being the person I am, I did answer them initially but then finally had to tell her to stop. She was no longer my client. She wasn't paying me anything and still trying to get my advice and support.
The Moral of the Story
The moral of the story here is if you have a contract and misquote client work, stick with it for the time you've allotted in the contract. That's a choice for you as the business owner. I felt it was ethically the right thing to do. I did not retain her as a client, and it was such a relief when that ended.
I learned a hard lesson that I need not be rushed to, especially when it comes to pricing.
If you're starting your accounting or bookkeeping firm, it is essential to understand that you'll probably price a lot lower than I would. At least that's what I did when I started because I was learning. It was more important for me to get work and to be busy.
Pricing
Since I'm going to be talking about law firm work specifically, I'll break it down to ranges that I believe a newbie would probably price it :
Solo firm: $350
Micro firm: $550
Mid-market: Varies but $995+ depending on its complexities
If you are more experienced, the pricing will look more like this:
Solo firm: $895+
Micro firm: $1,250.00
Mid-market: Varies but $2,500+ depending on its complexities
These prices include no software. All of my software purchases for my clients are made through a reseller. I do not do wholesale. I know many people do because they want to mitigate a client's chance of seeing the bookkeeping commodity company, QB Live. Still, I feel that the skill set that I provide is so far above a QB Live service that I'm not concerned with it, which is why I chose to specialize. I wanted to offer that high-level work.
More Questions to Ask
And yes, there's a lot of variables in the figures above:
- Is it an immigration firm with a lot of transactions?
- Is it in an estate planning company that has a lot of trust accounts to navigate?
- Are there multiple partners?
- Will there be more high-level needs for reporting?
Those all play a factor in pricing. If you answered yes to any of the above questions, you need to consider that when pricing.
Your next step is to review the file thoroughly. We already jumped into the steps in the earlier blog post which I cover the file review area of QuickBooks, "Your First Attorney-Client: QuickBooks File Review."
Also, a book I highly recommend is from Ron Baker - Implementing Value Pricing. It has so many great tips and advice. Even if you don't decide to value price, there is a ton of information on pricing.
I firmly believe that there's enough work out there for everyone. I'm excited to help people in my industry protect themselves from the future in accounting. It's a passion of mine. I know technology is going to swallow up the easy, simple jobs. And to that, I say let it! Let the commoditize bookkeeping take over the straightforward accounts that can be processed with bank rules. I don't want that work. I want to use my brain!
I cannot begin to tell you how much fun it's been to niche out my practice. It's opened many doors. My number one fear of being bored soon dissipated once I started to study the industry. I love it! Attorneys need our help! They didn't go to law school to be an accountant; they went to law school to practice law. They don't want to do the work we do, and many of them don't want to touch QuickBooks.
Next week I will dive into pricing a clean-up work.
I hope this is helping everyone with their first attorney-client. If you'd like more help, please join our Facebook group, QB Community Live!, and stay tuned for the mastermind group details. Additionally, I have an e-book that may help you too. Here's the link.
If you are an attorney seeking help with messy books, that's where we shine! Reach out, and we are more than happy to help you! We can automate your life and many of the work processes that happen in a day-to-day law firm.
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