December 14, 2005
Best Law Firm Practices for Increasing Effective Billing Rate
In general firm's looking to increase partner income should engage in structured planning to identify the main things the firm should concentrate on to improve the business over the long term. Almost all need to improve management with focus on the law firm business model - leverage, utilization, rate, realization and margin. This post deals with the firm's effective or blended rate.
The list below is a reminder of steps that you can take, among others, to increase billing rates and improve per-partner income.
Steps for Increasing the Firm’s Effective Billing Rate (its Blended Rate)
- Increase low rates to their higher competitive level
- Set higher rates for selected areas of specialization and expertise
- Take a more disciplined approach to annually reviewing and renegotiating rates
- Identify new specialty areas, train or acquire expertise, thereby increasing value and the potential for increased billing rates
- Market for better clients; those willing and able to pay more
- Develop and enforce case acceptance standards that emphasize the value of matters undertaken
- Improve (and sell) the quality of service, presentation of work product, technology, efficiency and responsiveness
- Take advantage of opportunities for alternative billing (value based) pricing
- Invest in a better business system for pricing flexibility, easier price changes, improved anniversary date tracking, etc.
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Filed under Law Firm Bus Model by Tom Collins