“I don’t want to pay for your time, I want to pay for the value you bring me.”
Ever heard that from a client?
At Smokeball, we provide software to small law firms but at the same time, a consumer of legal services.
We often describe Smokeball as a productivity software, and when small law firms ask me why we don’t sell to big law, I have often jokingly replied that the big law billing model rewards inefficiency so increasing their productivity is not their priority.
We’ve recently released our new AutoTime feature which automatically (yes, really) completes a timesheet for each attorney every day when you’re using Smokeball’s case management software. This makes it ridiculously easy to track your time, and therefore to bill your clients for your time. Which on the face of it, totally supports the time billing model.
However, as you may have gathered above, when I’m a consumer of legal services, I really don’t like being time billed. If you want to draft up an agreement for me, register a trademark, or whatever it is, telling me that it will cost our company $300 an hour frustrates me. Is it going to cost our company $1,000, $5,000, or $10,000?
Tell me it will cost $3,500 and I know what I’m dealing with, if I can budget it, and so on. Can I pay in installments or is it all upfront? This is a B2B relationship that I’m used to and appreciate. I’m in fact likely to avoid legal services if I can really help it when the cost is nebulous and could blow my budget. Businesses and individuals that are seeking legal representation want the best outcome for the expected cost.
The problem with moving to a fixed-fee model is of course “What do you charge?” Small law firms typically do not have the systems to understand what it costs them to do a particular type of case, or stage of a case.
One thing that is most exciting about our new AutoTime feature is that it provides you data that you’ve never had before. We’ve built performance and practice insights around AutoTime so you can see what it costs you to run a particular case. If you’re flat fee in a particular area of law, you’ll be able to see whether you’re charging the right amount! (You put all staff costs into Smokeball and it reviews the time put in by everyone on the case and instantly calculates the dollar amount).
However, if you’re not using Smokeball and AutoTime, you could simply look at cases you’ve closed in a particular practice area over the last 12 months and average out what you’ve billed to give you a good baseline. Sometimes you will win, sometimes you will lose, but it will even out.
You’re likely to develop closer relationships with clients who will come to you for advice they’re trying to figure out on their own.