Three Legal Project Management Tips for More Profitable Flat Fees

Flat charges solely work once you handle the work nicely. That’s the place these authorized undertaking administration suggestions are available in — to make sure flat payment profitability.

Authorized Challenge Administration Helps Flat Charges Succeed

We’ve been studying quite a bit these days about AI’s affect on hourly charges. Whenever you promote time, having the ability to get one thing in 10 minutes that used to take you three hours isn’t actually a profit, is it? Nevertheless, once you promote a metamorphosis or a consequence — when your providers have a price impartial of time — it doesn’t matter how lengthy you’re taking. Purchasers need the transformation you ship. They worth the consequence (a accomplished will, the sale of their enterprise, or the safety of their thought), and you may ship that consequence as rapidly and successfully as you may, with out being penalized on your effectivity.

That is the considering that underlies flat payment and worth billing, now made much more pressing by the pressures of AI. However once we requested legal professionals on a latest webinar what was holding them again from shifting to flat charges, the overwhelming reply was they had been afraid they’d lose cash.

Flat charges solely work once you handle the work nicely. That’s the place authorized undertaking administration, or LPM, is available in. LPM isn’t only for giant companies with undertaking administration groups and deep-pocket purchasers. It’s a robust instrument for any lawyer who desires to implement flat charges, improve effectivity, ship a greater shopper expertise and enhance profitability.

What Is Authorized Challenge Administration?

At its easiest, LPM is the apply of managing authorized issues like initiatives. Meaning:

Defining and agreeing to a transparent scope of labor upfront.

Setting clear goals and timelines.

Allocating sources successfully.

Monitoring budgets throughout the lifetime of the matter.

Speaking usually with purchasers and group members.

It brings readability, consistency and management to how authorized providers are delivered. You’ll be able to be taught extra about it right here.

Earlier than you value, LPM helps you outline what’s included and what’s not. Throughout the work, LPM retains the matter on monitor, inside scope and finances. After the matter closes, LPM allows assessment and enchancment for future pricing.

You don’t have to be a licensed authorized undertaking supervisor to use LPM methods in your apply, however you do must shift your mindset. With hourly billing, time is cash. With flat charges, effectivity is cash. LPM offers the construction that you must scope, value and ship flat payment issues effectively and profitably. With out it, you threat underestimating the work, overdelivering free of charge, or damaging shopper relationships when expectations aren’t aligned.

Three Authorized Challenge Administration Suggestions for Flat Price Success

In case your small agency is exploring or already providing flat payment pricing, listed below are three LPM-based suggestions to make sure you keep worthwhile and hold your purchasers completely happy.

1. Scope Each Matter

Tip: Break your issues into distinct phases and deliverables. Clearly outline what’s included and what’s excluded. Begin together with your typical matter and think about the duties and deliverables which might be often required. Suppose, too, of the everyday variations and contingencies you typically run into. Resolve what you need to embrace in your payment and don’t be afraid to cost the variations individually, both as a menu of extra flat charges or hourly.

Why it really works: Most flat payment failures occur as a result of the scope is just too obscure, so the work expands past what’s worthwhile. To keep away from scope creep, make sure you and the shopper know precisely what you’ve gotten agreed. A well-scoped matter may embrace: “This flat payment consists of two rounds of revisions to the shareholder settlement. Further revisions will probably be billed individually at [$X per round of revisions or $X per hour].”

Profit: Scoping is important to the profitability of your flat charges. It clarifies expectations, prevents miscommunication and protects your margin.

2. Outline Assumptions Upfront

Tip: Doc any assumptions that underpin your pricing and share them with the shopper.

Why it really works: Flat charges typically depend on sure assumptions (e.g., the shopper will present paperwork promptly or opposing counsel will cooperate). If these assumptions fail, your prices go up. That is the supply of the worry legal professionals expressed to us about dropping cash.

Profit: LPM encourages upfront communication and proactive threat administration. Stating your assumptions from the start means that you can value your matter correctly. Much more importantly, it helps you reset or renegotiate when issues change. For instance, you may state: “This payment assumes that discovery is not going to exceed 2,000 pages and that no third-party subpoenas will probably be required.”

3. Actively Handle the Work

Tip: Use activity lists, timelines and group check-ins to maintain issues shifting effectively. Many apply administration platforms have built-in activity lists and checklists. Our teaching purchasers are having nice success with techniques like Legalboards and Clio’s Matter Levels, each of which give them good visibility into the place issues stand. They’ll see at a look who’s engaged on what and if some duties are stalled, after which deal with points instantly of their common group conferences.

Why it really works: In the event you lose time due to unclear obligations or missed deadlines, it eats into your revenue. You’ll be able to’t afford to be inefficient once you’re engaged on a flat payment foundation.

Profit: Challenge plans and common check-ins guarantee the correct individuals are doing the correct work on the proper time. You’ll ship sooner, with fewer errors and surprises. You’ll additionally be capable of delegate extra simply to junior group members or VAs, so you may spend extra time on the high-value duties in your Energy Zone.

Don’t Take Dangers: Use LPM (and a Guidelines)

With out authorized undertaking administration, flat payment work is a guessing recreation. With it, you achieve the construction, transparency and confidence to scope and ship authorized providers predictably and profitably. Begin with one matter kind. That will help you out, we’ve put collectively a free Flat Price Planning Guidelines. You’ll be able to obtain it right here.

Work by the guidelines. Plan your work, outline the scope, and doc your assumptions. Then attempt it. Your flat payment most likely gained’t be excellent the primary time, however as you get higher at scoping and managing your issues, your flat charges will turn out to be more and more worthwhile.

Karen Dunn Skinner and David Skinner assist legal professionals and authorized professionals construct extra environment friendly, productive and worthwhile practices. They’re the co-founders of Gimbal Lean Apply Administration Advisors and legal professionals with over 20 years of expertise every in Canada and Europe. Collectively, they’re the unique International Advisors on Authorized Course of Enchancment to the Worldwide Institute of Authorized Challenge Administration. They write and converse usually, facilitate authorized course of enchancment initiatives throughout North America, and have taught Gimbal’s LeanLegal® method to 1000’s of authorized professionals.

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