Week of September 23, 2008 |
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Can You Compete Against
One of the most fundamental elements of The Business of Law® is to look at your revenue and figure out what your cost structure should be so you can turn a profit. Consider a law firm where the revenues from a given client are $40,000, while the costs to service that client in lawyer and staff compensation are $48,000. In this critical situation, a decision must be made. The choices are hard, but each one must be considered in turn. Terminating the client relationship, seeking to leverage cost-efficient technology and decreasing the number of people serving the client are all standard remedies to reduce cost.
Many lawyers are still charging less than $200 per hour. Though faced with competition from other lawyers (and now paralegals), lawyers must fight to find ways to increase their fees, whether by the hour or otherwise. Like every other profession and trade and business, the practice of law is a business. That means we're governed by the same formula:
P = R - E
If you are a widget manufacturer, the question becomes, "Can I sell enough widgets to cover all my costs and have something left over?" Replace "widgets" with "hours," and you have the question that goes to the heart of The Business of Law® for smaller law firms that use the billable hour approach to fees.
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Secrets of The Business of Law®: Successful Practices for Increasing Your Profits! Provides attorneys and law firms specific and practical suggestions for being more effective and making more money in the process. This book is organized in five parts (Planning for success, Client Relations, Financial Management, Law Office Technology, and Office & Management Issues) to help lawyers learn how to:
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