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That’s a nugget given to me by Rjon Robbins over at How to Manage a Small Law Firm on a helpful coaching telephone conference recently.

Simply it’s the old “ghost” of under-billing reappearing which I’m trying to exterminate from my life and law practice once and for all (see my post entitled, Another Problem with Under Billing). Next call, Ghostbusters!

Rjon gave me some great thoughts to really put my fees at the level they should be instead of shooting myself in the foot via under-billing. We spoke in the context of an uncontested divorce where I’m currently charging flat fees ranging from $750-$2,000 depending on things like the nature of the asset division and/or child-related issues. He asked me what would I like to charge? Reply, $2,000-$4,000.

So how to ramp up my fees?

1.  Charge the fee you want to charge. Not always easy for those of us not particularly comfortable asking for money. But, I’ll only make $4,000 if I charge $4,000.

2.  Now cram a great product and wonderful services into that “package” to fit the premium pricing. Since if you’ve been paid a solid, premium price then doing great work for client and meeting with client regularly and staffing client regularly is fine and rewarding. You’ve been paid handsomely and you’re doing excellent legal work. I think we’ve all “felt” the difference in the legal work we’ve done for great client who pays promptly versus not great client who at their best pays but not promptly…the pricing issue is essentially the same issue.

Because the opposite scenario is a lawyer killer that I’ve been through (survived physically, true, but the practice suffered). The opposite scenario is the post’s title…it’s under-billing or charging too low of a fee with the result being I whittle down the legal services and quality of legal work I provide to fit the too low price. The real life picture is client pays fees of lets just say $500 for an uncontested divorce. Now I know I can spend very little time on this case for it to retain even a semblance of profitability for me. Any more than maybe 3 hours of my time and this has become a total money loser, right? So now there’s a client who thought she was getting my “A game” who isn’t happy being ignored and there’s me as lawyer also unhappy that I wasn’t using my “A game” because I want to be an excellent attorney but can’t be one when I under-bill. With the conclusion being an unhappy client who won’t be recommending me to her friends (if not outright criticizing me to her friends) and a dissatisfied lawyer who hurt his practice and pocketbook only because of a stupid fee quote up front.

Under-quote one case and it’s a useful learning experience but do this repeatedly and it’s devastating to your law practice.

I hate to just be a re-poster but once in a while we’ll sacrifice originality for quality. The great Ed Poll tweeted this today from his LawBiz Forum, How to Get Paid:  It’s in your hands. Take a look at the full post, he’s got 9 golden nuggets that can each help put dollars in your pocket.

Some new-to-me billings ideas:

Have a high billable to collected ratio. In other words what % of the time you’ve billed to clients is actually getting paid. Interestingly, if you’re under 80% that’s a problem for sure, but also, if you’re over 95% that could be an indication of too low of billing rates.

Collection cycle management. See the full post…I actually implemented part of this that I had previously read in one of Ed’s book by shifting our billing cycle close date to the 24th day of the month from the last day of the month. Another idea he lists is breaking up the alphabet and billing different chunks of the alphabet say every week or 10 days, spread throughout the month. Perhaps when the number of bills I’m sending out each month gets larger this MAY be viable, but it sounds like a tad of a hassle to be doing billing 3/4 times per month.

Don’t ask for money yourself. Separate yourself from the billing function.

If necessary, use a collection service. I DISAGREE with this. From my experience collection agencies can be as much of a pain in the butt for the creditor as they can be for debtor. We used to use a collection agency as sort of our last resort. I soured on them because we had a client who we referred out to a collector who called then called him. Then we didn’t get immediate payment but we cut a deal with the client about how to proceed. But the collection agency would not stop contacting this person and it became a real problem between the client and I. I’ve sworn off collection agencies. It’s kinda like dealing with foreclosure law firms as part of a real estate transaction, they can’t unlearn the harassment habits no matter the type of scenario.

Or if you don’t, these are some great insights into how to better compete with other attorneys.

The headline stems from this article here, How Do Lawyers Get Away With This Stuff?, that I read recently in the NYTimes’ Small Business Blog – You’re the Boss, The Art of Running a Small Business. As an aside that blog gives some of the best, consistent small business advice that I’m aware of…most of the columnists are small business leaders.

First let me summarize and extract some quotes directly from the article. Notably, the author of the piece is Jennifer Walzer, President of Backup My Info! which I think has gotten a fair amount of publicity as a hot, up-and-coming business in the fast growing online/off-site data backup marketplace…I mention that because when you hear her complaints about lawyer service I would think she and her company would be pretty welcome clientele for 90% of lawyers out there. The background of the article is Ms. Walzer hired a lawyer to review a new lease for her company and the article describes her experience in dealing with the particular lawyer/firm. This opening ‘graph is great:

At my company, we try so hard to provide great customer service that I sometimes forget that bad customer service exists. And then I hired a lawyer.

First…

We sat down to talk, and I explained that I had a relatively straightforward sublease agreement but wanted to make sure that I was protecting myself. The lawyer said he was happy to help and asked for a $2,500 retainer fee, explaining that based on what I had told him, the total fee probably wouldn’t exceed that amount. Fair enough. I sent the check and the agreement for him to review. I had enough on my plate and wanted to trust him and his firm.

It was another lawyer from the firm who got back to me. He informed me that the agreement was relatively standard but needed a few changes. I reviewed the comments and my impression was that some of the changes he made were a bit of a stretch, but again, I wanted to trust their judgment. I let them make their changes. I had paid for $2,500 worth of service, so I figured I might as well let the lawyers do their thing. And did they ever …

Okay, sounds pretty routine, and next…

I had a few more conversations with the first lawyer in which we discussed forgoing the good guy guarantee versus providing a larger security deposit to the bank (I didn’t like the idea of having to personally guarantee the rent for four years). That prompted them to send me an additional bill — for $1,450. I wasn’t thrilled, but I figured it was O.K.  because I’d raised some more questions. At that point, the deal was pretty much done, so I paid the bill and called it a day.

And, finally the REALLY GOOD STUFF…

Imagine my surprise when a few weeks later another bill arrived. This one was for approximately $2,500. It contained a long list of itemized charges that made little sense to me. I checked my phone log to try to match the calls with the charges, and the numbers weren’t there. I assumed there must be some mistake.

I called and left a polite message for the billing manager, asking her to call me back whenever it was convenient. Instead, the two lawyers called me together on speakerphone, addressing me right off the bat in a hostile tone. They demanded to know why I had an issue with the bill, which caught me off guard. I asked if we could review the bill since it wasn’t adding up for me. They immediately became defensive and asked me to prove to them which charges were inaccurate.

I picked an e-mail from the list. I had been charged for 0.2 hours at $300 an hour ($60) for one lawyer’s reply to an e-mail I’d written letting him know that I was not going to be available and would review his comments when I was back in my office. I wrote this as a courtesy to let them know my status. It demanded no reply, but I got one anyway. It said: “I hope everything is O.K. Take your time.” I thought it was nice of him. It never occurred to me I would be charged for it.

Flabbergasted, I asked how they could charge me $60 for a courtesy e-mail. The answer left me even more flabbergasted. “Jennifer,” said the first lawyer, “your e-mail took me away from a multimillion dollar agreement I’m working on, so if I have to stop what I’m doing to view and respond to an e-mail, then I have to charge you.”

That’s an incredible tale at one level but sadly so NOT surprising on another level. Particularly in some of my court-appointed contempt work it’s eye-opening at some of the lawyer treatment and lawyer billing I hear and see first-hand when I take my first meeting with these clients and also review the court’s case file and see huge fee petitions against former clients with very little having been accomplished.

Why does this sort of thing exist with lawyers and what to do?

There’s likely many reasons but I tend to think that older generations of lawyers say the 50+ crowd who are managing many firms these days are relics of an era where the legal field was rather immune from competition. In other words there were way fewer lawyers out there and thus less competition. The last 15 years or so has seen a huge increase in the number of practicing lawyers. Lets face it, there are surely aspects of legal services where the offerings are commodity services where there’s virtually no difference from one lawyer to the next, at least on the substance of the issue. Whether it is or not, I would suggest really competing with the mindset that the legal services you’re offering are a commodity and you’ve got to hustle, be innovative with alternative billing, and provide great customer to win business. I mean McDonalds isn’t going to get away with the crap that was described above, right? I’d just go to Wendys.

How might you compete with the sort of billing and customer service practices listed in the article above?

Billing Clarity. Surely there’s probably some “back story” to the article above but from what you read the client was quoted $2,500 flat-fee for a commercial lease review and she ended up being charged some $6,000. She seemed to be satisfied when the bill was at $3,600 since she had raised some issues that hadn’t been discussed up front. But however the client is being billed why not just be clear about an hourly rate, a specific flat-fee amount, or extra charges. If a client is unhappy with a result or your services that’s not totally unavoidable, but “billing surprises” are avoidable.

Billing Alternatives. A commercial lease review seems to me that it should be something a lawyer should charge either a flat-fee for or perhaps a combination hourly rate with a “fee cap” on the top end. I’ve done this sort of thing a few times in my career and I don’t think it’s too different than the sort of negotiation that occurs in buying a home…there’s a sort of set time for some negotiations of fairly standard things and then you get to an agreement and you’re done. So on the lawyer side it’s pretty predictable in terms of lawyer time needed. Why surprise a client if you don’t have to and create the potential for client ill will? Even with hourly billing a fair, honest thorough bill need not surprise a client…it sounded like there was some old fashioned “bill padding” going on in the example above. My firm is getting ready to start offering a flat-fee monthly billing option for even some unpredictable practice areas such as dissolution of marriages where someone will have to use an automatic payment option like a credit/debit card and then each month they’re charged somewhere in the $250-$750 range regardless of the amount of work done that month. I have a few final things I need to figure out about this before it’s a “go” but in other words we’re trading the potential for higher fees in some months for promised consistency and client won’t need to bring a big retainer in up-front and there will be no “billing surprises.”

No Charges. Do you ever use these on your bills? You should (I probably use them too much). The $60 e-mail above being a perfect example…doing work for a client and listing on your bill but not charging for it. I do it when someone calls for something like when is court tomorrow or that sort of purely logistical kind of thing where I’m not giving legal advice at all. I’d be pissed too for getting charged for the $60 e-mail listed in the article above.

There are great opportunities for lawyers to boost business big-time by focusing not on legal substance but rather customer service and billing innovations!

A Reluctant Retailer Decides to Open Her Books. Just substitute “law firm” for the word retailer in that headline and I think this article could be hugely impactful to you firm’s bottom-line. I think the key “take aways” from the article are really unlocking the unused intellectual value of your lawyer and non-lawyer staff alike and really building a business team. I haven’t done as good a job as I should over the years but I’m amazed at the ideas we generate when my legal assistant and I really dig into the business issues we’re confronting. The sort of all-knowing lawyer or CEO concept is stupid primarily because it so under uses the strengths of other employees.

Supreme Court Rules for Student Seeking Discharge of Student Loan Debt. Although not a fan of financial irresponsibility in lending and I am someone who does have moral qualms with bankruptcy discharge, it’s nice to know there may be some options for students. Here’s SCOTUSblog’s take on the opinion.

Staying Ahead on Retainers. This was part of the ISBA’s Illinois Lawyer NOW, Best Practices column recently. Likely a problem for many over-stretched sole practitioners. I definitely like the **get larger retainers and **actively push the use of credit cards ideas. Personal example with me is just comparing a handful of our clients who are on the “automatic credit card charge plan” versus the more typical mailed monthly bill people…the credit card folks I KNOW I’m getting paid that day we close our billing cycle whereas the regular mailed monthly billed people it’s more of an I THINK/HOPE I’m getting paid sometime sort of feeling. BIG DIFFERENCE! Here’s the link to the Illinois Law NOW Best Practices page with a bunch of free, useful practice management columns.

The Danger of Domestic Relations as a Practice Area…see here, here, and here. One piece discussed a lawyer’s alleged assault on an opposing party in an Order for Protection case…not surprising to me sadly. I haven’t been a part of any assaults but I see way to many lawyers losing their cool and even making harsh verbal attacks on an opposing party. Then there was the jailed deadbeat dad who tried to egg the judge…how’d he get the egg if he had been incarcerated?? And then the rash of religion/custody disputes that I’ve seen lately in domestic relations land. I think the divorce/religion package is more combustible than politics/religion.  I tend to view this litigation as attempts by custodial parents to over-intrude on the non-custodial parents’ parenting/visitation time.

Are You CEO of Something? This relates a lot to the first item above and really just getting more out of your people by being a good manager. And it’s a double-positive…you delegate and make your legal assistant “CEO” of certain areas of your business really empowering/growing him or her and it lets you focus on more important things. So far my part-time legal assistant is CEO of client billing, office supplies, and post-closing real estate file/mailing procedures.  Here’s a bit from the article:

We had this really motivated, smart receptionist. She was young. We kept outgrowing our phone systems, and she kept coming back and saying, “Mark, we’ve got to buy a whole new phone system.” And I said: “I don’t want to hear about it. Just buy it. Go figure it out.” She spent a week or two meeting every vendor and figuring it out. She was so motivated by that.

Well, there’s about 8 hours left in 2009 as I jot down a few thoughts here in the Central Standard time zone. Can I say that New Years Eve is a non-event for me…not sure why although it may have to do with the fact I’m more of an early morning person than a late night person so the concept of staying up past midnight to see fireworks or some lighted ball dropping isn’t quite the cat’s meow for me. But the one thing I do enjoy about the transition from year-to-year is the opportunity to reflect on the last year and plan ahead to the next year.

Here are 4 Final Thoughts for 2009 from one Solo (attorney) In Chicago…

Steady Income Sources are Nice and/or Cash Flow is King. I’d guess that like with me, this is a huge struggle for many solos. I think a lot of it stems from the fact that sole practitioners tend to be more dependent on individual clients than larger law firms. And if these individuals are anything like some of my clients they’re not always rolling-in-the-dough which equals paying their lawyers in dribs and drabs. It’s hard to lawyer like that and it’s hard to live with that. Can you find some steady sources of income to create an “income floor” that you can count on each month? Over the last 6 months or so the combination of my work as part of the Cook County Domestic Relations Division Referral Program (run through the domestic relations division of the Circuit Court of Cook County per rule 13.8b) and as an arbitrator through Cook County’s mandatory arbitration program have allowed me to create more a floor under my income. Not huge dollars but at least I have knowledge at the start of each month I can count on say $1,500 of income that isn’t dependent on a client’s payment that month. Might there be some court-appointed options that you can plug into? Or is there a way you can gain some business or entity clientele with more repeat business to supplement your individual clients?

Marketing/Selling is Key. Here’s a fact they don’t teach ya in law school:  The lawyers who make the most money aren’t the best legal practitioners rather the lawyers who make the most money are the best salespeople and marketers. This fact is of the utmost importance if you’re starting/building a law firm. I’m just about at a point where I’ve located the marketing sweet spot in terms of really getting the phone ringing regularly with new client inquiries. The big 3 marketing channels that work for me are:  1) Current/former clients (reached via personal meetings/contacts, annual mailing, and monthly Constant Contact e-mail newsletter); 2) Other professionals (reached in many ways like category #1 plus memberships in local Rotary and LeTip chapters); 3) Bar Association referral services. For me categories #1 & #2 are where the action is BIG TIME. Other areas I’m pondering are better Internet-based ads and targeting the evangelical Christian community which I’m active in better. I’d hope to maybe do an interview with some small firm attorneys and their Google AdWords experience. I see them up on this blog and they just seem so generic that I can’t imagine why/how they’d be effective plus I’ve heard of some bad experiences…I suppose it’s all about the correct keywords, no?

Under-Billing:  A Problem with Solutions. This is becoming less of a problem for me as my self-confidence grows, I see the quality of work I do vis-a-vis other attorneys (and vis-a-vis their billing rates), and I do better with regards to items 1 & 2 above…in other words these things are all interrelated. Lawyers under-bill because they might not think they’re very good lawyers but I’m starting to see I am a pretty good lawyer. And as I build some steady income sources and effectively open several effective marketing channels I’m not as worried about losing that 1 client if I quote too high of a fee because there will be others who will happily compensate me for the quality of work that I do.

Use Friendly But Aggressive Billing Communication. I like where I am right now with regards to our billing communication and follow-up. And I don’t say that theoretically, I say it meaning we’re getting paid well and our receivables are reasonably low. What’s working for us? It’s one non-lawyer’s job to mail our bills our each month and to follow-up with clients at specific time increments if there has not been payment. And this isn’t some a-hole collection agency (I’ve sworn off of them) rather it’s a friendly member of our staff making a reminder call. Full and accurate communication in your billing is key too…the description on your bills is as important as any of your in-court legal writing and probably more. I bet most clients are reading your bills more closely than a lot of judges are reading your pleadings. Eventually you must withdraw and bring your fee petition if there’s non-compliance. I haven’t crossed the sue-my-ex-clients bridge yet, BUT, if you’re in area like under the Illinois Marriage and Dissolution of Marriage Act where you can bring a simple fee petition as a pleading like anything else in the case you’ve got to do it. Clients seem to act if you’ve got a judgment against them and a wage deduction’s comin’.

SEE YOU BACK HERE NEXT YEAR!

Some occasional, insightful nuggets from around the BLAWGSPHERE…

Representing Family Members and Other Horrible Life Decisions (Nutmeg Lawyer). Nutmeg includes a nice listing of factors to consider when looking at friends & family representation. He includes a jarring story where a lawyer represented a very close friend in a divorce and the lawyer’s emotions ended up getting the best of her. Personally I’ve had some excellent family/friend representation within boundaries. I’ve for the most part represented friends/family in real estate transactions and estate planning plus a couple of sort of easily settled lawsuits. Bottomline, who do ya know better than friends and family and those I respect and know will be professional and pay my fees and are great clients. In my experience most of my friends/relatives expect to pay market value fees and are adamant about doing that.

The Most Expensive Mistakes a Lawyer Can Make (Chuck Newton). A very useful list indeed. At a recent ISBA Webinar that I moderated along with a couple of colleagues the unanimous answer to the question, “What was your worst decision you’ve made since starting your law practice” was under-billing or as Chuck lists inadequate pricing. That along with wasting $$ on office space i.e. borrowing/spending too much on Chuck’s list were my answers.

The Chicken or the Egg? Changing Practice Areas in Challenging Times (GAL).  A great & relevant point for us all no? I’ve probably been keeping my power a bit too dry in this area. GAL’s experience:

I would make several observations from my own experience.  First, the internet makes expertise available.  With a little hard work in your spare time, there’s almost no area of law you can’t gain base experience in.  Further, your chance of getting a case within a practice you’re interested in is no more than random luck, unless you go out and develop an expertise and start talking up that expertise on the web and on the street.

Wanna be a lawyer? Well, get thee to a courtroom (Ernie the Attorney). That’s a great tip all the time. If you can stumble on a few interesting cases in a courtroom while waiting for your matter to be called you’re very lucky. This is very worthwhile and easily done both for the substantive law you may learn & for more “perception issues.” I experienced some perception issues first hand recently when I served for the first time as a Cook County Arbitrator. The arbitration rooms are small so I’d closely observe the plaintiff’s and defendant’s lawyers. And the way the lawyers act from the moment they step into the room surely impacts likability and likely in some subtle way a court’s ruling.

Well I suppose the only real way to do the above is to retire from the legal profession so please take the above headline with a grain of salt.

But I am constantly trying to alleviate some of MY clients’ “payment problems.” Part of my attempt to deal with “the problems” was to pick-up my copy of Ed Poll’s, The Business of Law, which I’ve owned for several years but hadn’t ever read. I don’t know Ed personally but I’ve been following him on Twitter (@LawBiz) for the last several months and I’m a regular participant in his LawBiz Forum. Ed’s background in helping lawyers become more profitable speaks for itself. I’m not through the entire tome as yet but I have been focusing on the several chapters in the section entitled Financial Management.

Some general things to check out are some of his financial forecasting tools and his two suggested methods for pricing legal services (his so-called Cost-Plus & Market pricings). An interesting factual nugget, “The average national accounts receivable cycle for lawyers’ services is 4.3 months.” Ugh.

But we want some action points to put dollars in your pockets, no? That’s what I need.

Here are 3 easy-to-implement billing/financial planning nuggets I’m thinking about and I’ll report back on the final implementation:

• Billing cycle change. My firm sends out client bills on a monthly basis. I’d guess most lawyers who are primarily involved with hourly billing sorts of matters send out monthly statements. For the 4+ year history of my firm we’ve closed our billing cycle on the last day of the month and then mailed bills to clients the first few days of the next month. The problem? The majority of our clients’ payments don’t come in until roughly the 15th-25th of the month. And this is often a problem because both within my business and personally I have bills that sometimes are dependent on client payments due at the start or middle of the month…and that’s a problem! My solution:  Change the end date of our billing cycle to somewhere in the early 20s day of the month and then mail bills essentially 7-10 days earlier than we’ve been doing. The goal being to move the client-payment-received window forward to the 5th-15th.

• Incorporate “Evergreen” Retainer deposits. With the exception of real estate transactions, we generally require a retainer deposit from clients up front which then gets billed against as we do a clients work. I suppose we can always take larger retainers upfront which is probably half of the solution. However I do often think clients might struggle to make too large of an upfront deposit. Yet on the back end of things my problem has been once the retainer deposit has been used then we’ve been in the habit of simply billing clients for the work done that month. And then we start to have payment problems because we’re totally at the client’s whim. My solution:  Ed mentioned the “evergreen” retainer idea to me being simply a client must always keep some minimum amount in my trust account until the representation is completed. Then if there’s a payment problem I will always have some funds to collect against. I haven’t finalized the amount of the “evergreen” retainers as yet and I think it will vary by the nature of the case…seems like a range might be $250-$750.

• Consider a discount for clients who pay promptly. Here I’m aiming at the same problem as the billing cycle change…simply, getting client payments more quickly. So I’m deciding about what date deadline I’ll use that will qualify a client for a discount & what should the discount be. I’m leaning towards post-marked by the 15th of the month for the date. As for the amount, kind of wavering between a fixed-fee vs. a %. 10% sort of sounds good and would be easy to calculate but that seems too large.

Thoughts??

Well, it’s not quite a death in the family but…

Pulled that quote from this piece at law.com about law firms suing former clients for back fees. ABA Journal had an erely similar article on the same day…and now I’m posting about it. Interesting that one of the law firm’s suing former client allegedly was owed $400,000 in fees.

Who stays in a case where there’s that large of an unpaid bill?

I’m still for the most part following this “collection policy” with my firm. Personally I have never sued a client for fees (with a caveat to come) nor seen it done at the two smallish firms I worked at prior to my current set-up. However, as someone who practices a good amount in cases covered by the Illinois Marriage and Dissolution of Marriage Act, there is a specific section of that Act (508) which allows a former attorney to bring a fee petition against a former client (typically you bring a fee petition immediately after you withdraw). I have used this mechanism and will continue to do so…you get a judgment without the hassle of filing a separate suit.

This was a chunk from an article recently published in the ISBA’s General Practice, Solo, and Small Firm newsletter (sorry password protected). They actually have a very good newsletter well worth the $20 per year…and I’m not just saying that because I’m a member. Note the below. I added variations of the below to our agreements:

Unavailability of Attorney/Client’s Consent to Temporary Substitute Attorney/Limited Confidentiality Waiver. In the event attorney is unavailable or becomes ill, disabled or dies unexpectedly, client consents to another lawyer, chosen by attorney or attorney’s legal representative, appearing for the attorney and to the extent necessary reviewing the file and handling the file until attorney becomes available or a successor attorney is chosen by client. For this limited purpose, client waives confidentiality and consents to the other lawyer’s appearance and access to clients’ file for the purpose of taking appropriate action to protect clients’ interests. To the extent possible, attorney will discuss with client the need for the other attorney and identify the other attorney, prior to having the substitute attorney temporarily act for or appear for the primary attorney and the client.

No Guarantee of Result. Client understands that the Attorney does not guarantee any specific results and that the nature of a domestic relations or other matter is such that evaluations of the case and advice as to dealing with particular items or transactions is subject to change from time to time as the case progresses and circumstances and/or the Client’s goals change.

No Cost Estimate Due to Factors Beyond Control. Client further states that he/she understands that a significant part of what is done in a domestic relations case or other matter is based on what the opposing party does or does not do and upon other factors over which neither the Attorney nor the Client have any control. Such factors, particularly the action or the inaction of the opposing party, may substantially increase the fees and costs involved, and therefore there is no realistic way that the fees and costs can be estimated or controlled.

I’ve posted before on the problem of under-billing here and here and for different reasons including several seminars I’ve been involved in of late have been thinking a lot about the problem of under-billing and what a practice killer it can be. I think a decent analogy would be the issue of pricing a house to sell. So my wife and I have a semi-regular ritual of watching TLC’s Property Ladder on Saturday mornings. It’s a program about renovating homes and then flipping them for a profit. And after watching many episodes one realizes the importance of pricing the home for sale after all the renovation is complete. Frequently the first-time flippers will make all sorts of mistakes and go over-budget and miss their timelines, ect., BUT, regardless of how well the flippers did on everything up until the open house (good or bad) if the home is priced improperly the flipper will often be in big trouble and not sell the house.

It’s similar to pricing your legal services. You can do everything else right such as actual lawyering, business management, even marketing and yet really not retain clients and build the kind of business you want if the price ISN’T right.

Trey Ryder’s weekly e-mail marketing newsletter did a great job of explaining this under-billing/under-charging problem (as an aside, the e-mail newsletter is a free sign-up and often quite informative).

Here’s a blurb that underscores the big problem…

ADVICE:  I encourage my clients to charge on the high end.  It’s much better to be the most expensive lawyer in town and have people appreciate your knowledge and experience — than to be the cheapest lawyer in town and have prospects question your skill.

No matter how narrow the audience you’re trying to reach, you can probably find hundreds of prospects in that target audience.  The key is having a competent marketing program that can effectively identify, reach and harvest those prospects so they become your clients.