How to Set and Raise Your Billing Rates

One of the questions I am asked most frequently by callers to the Pennsylvania Bar Association Hot Line is how to set and/or raise billable hour rates. My peers at other state bars are likewise called upon frequently to address this issue. A combination of factors come into play including:

**Benchmarking — how much are other firms charging? Comparing isn’t always so easy, as factors such as firm size, geographic location, practice area, and even reputation (e.g. branding) can cause benchmark numbers to vary widely.

**Firm Economics — what is your firm’s bottom line? How much are you paying to produce each billable hour, both in labor and overhead?

**Value Added — here’s where the “art” comes into play. Knowing your value to the client. Knowing what differentiates you from your competitors. Knowing how to craft your bills to emphasize value delivered instead of just increments of time.

If you haven’t already read How to Draft Bills Clients Rush to Pay, you should. You can buy it from the American Bar Association Book Store. PBA members can order it directly at a section discount. If you don’t know how, just go to the PBA web site, and log into the Members Only section and look for member benefits.

Another good resource to get you started on the road to understanding how to set and raise your rates is an article entitled The Art and Science of Setting and Raising Rates, which was just posted to the web site of Freedman Consulting.

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Other Links to this Post

  1. Law Practice Management » Blog Archive » Should You Discount Your Fees? — February 8, 2008 @ 1:38 pm

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