Lawyers Professional Fees: How To Bill Your Clients Per Hour.

December 1, 20200

In legal practice, professional fees refer to all claims for fees, for services rendered and reimbursement for expenses incurred by lawyers.

Professional fees are usually charged by some professionals like doctors, accountants and lawyers for their services.

There is a pearl of long time wisdom expressed in the saying, “Time is Money”.

The value of time, however, differs from one person to another. People, therefore, tend to charge their fees based on how much their time is worth.

When lawyers set up their law firms, one of their biggest concerns is how to charge the correct legal fees.

To build a successful legal career, you must master the art of charging and collecting your professional fees.

There are many ways lawyers charge their clients, depending on the kind of service rendered.

One of the ways lawyers charge their professional fees is per-hour billing.

Hourly Fees.

In legal practice, hourly fees refer to the amount of money lawyers charge for the work they do per hour.

In some jurisdictions, per hourly charge is the most popular way legal practitioners bill their clients.

One good thing about per-hour billing is that clients only pay for the actual amount of work put in by a lawyer.

There is equity in per hour billing. Simple matters will take less time and cost a smaller amount, while complex cases will take a longer time and cost more.

Lawyers who charge per-hour usually keep a record of how much time they spent on a particular case and bill their clients accordingly.

How to Charge Per Hour.

If you have decided to charge your clients by the hour, how do you determine the adequate amount per hour?

To arrive at a proper amount to charge per hour, a lawyer must take into consideration the following factors.

Discuss it with your Clients.

Most customers who want to hire a lawyer have a good idea of what they want to spend on the project or matter.

It’s essential to give your clients an idea of how much the whole case will cost to know if their budget can cover it.

Your clients’ budget will determine if the per-hour billing will work and if you need to switch to other forms of billing.

Lawyers are under an obligation to explain to their clients not only the cost of their matter but also the particular tasks that will go into it.

If you decide to bill per hour, remember to write everything down and have your client endorse it.

Some clients can deny that they agreed to a particular billing method, and this can lead to quarrels and lawsuits.

lawyer fees photo

Consider your Running Cost when Charging Professional Fees.

In charging their clients, lawyers sometimes forget that they have bills to pay to keep their offices running.

Some of the bills that lawyers pay to run their offices include:

  • Office space.
  • Furniture.
  • Office equipment.
  • Stationaries.
  • Practicing fees.
  • Income Tax.
  • Power.
  • Bar memberships.
  • Medical insurance.
  • Other expenses.

A lawyer’s professional fees must not only cover the cost of running the law firm but must include the cost of other living expenses.

If a lawyer’s revenue is only enough to run his office, it means he is not making any profits. A lawyer needs to make extra money to break even.

Lawyers should calculate the total sum of running their law firms and divide it by the number of hours they expect to work in the year. Whatever they get should be the minimum that will keep their heads above the water.

A lawyer must therefore charge what will help him pay his bills and also take care of other areas of his/her life.

Use Time Tracking Tools.

Time tracking tools can help your law firm to generate the accurate number of hours spent on each case and each activity.

This way your clients can trust you to arrive at the correct fees for their cases. 

Time Doctor, Clockify and Toptal are good examples of time tracking tools that keep track of work hours. What’s more, these tools help you to generate billing information for each client.

If you’re going to charge per hour, it is best to use a software. It will save you a great deal of time and energy, which you can then channel into other critical tasks.

Consider Market Rates in your Professional Fees.

Lawyers must be up to date with current market trends and information and add that to their hourly charges.

Find out what other lawyers are charging to know whether you are under-charging, over-charging, or charging correctly.

Provide Quality Legal Service.

Remember that no matter what you charge for your services, clients will complain and want you to reduce the fees.

Lawyers who provide quality legal services are more likely to convince their clients to pay them even per hour.

Clients are always willing to pay more if they think they are getting experienced service from you.

Wrapping it Up on Charging Professional Fees Per Hour.

There are many cases where billing per hour is the best option when charging for professional fees.

Some of the advantages of per hour billing include:

  • Per-hour fee gives a client the option of pay-as-you-go or to pay as the need arises.
  • The client sees what the lawyer is doing and has accomplished.
  • The per-hour fee reflects the actual amount of work the lawyer has done.
  • Hourly fee limits a lawyer’s legal responsibility to his client.

Lawyers should use per hour billing only when it is necessary as there are many disadvantages.

Hourly billing is simple and will prevent you from being an eternal slave for your clients who will pay you once and expect you to serve them forever.

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