Chapter 1 - Yes, you are worth the going rate
"LOL!!!" This is a typical reaction of a young, directionless or undisciplined lawyer who has no clue how the business of law works. The first point of order is to get over this disbelief and transform "LOL" into "AAMOF."
What have you heard about the going rates charged for young lawyers, 3-year attorneys and 5-year attorneys? Probably somewhere around $200, $250 and $300 per hour, respectively.
If you have reason to doubt these rates are really being charged, then, you should go to your local courthouse. Find the clerk for one of the judges and ask him if he can steer you to a case file you can see, where a lawyer attached an affidavit in support of a claim for attorney's fees. This can be a collection case. Most typically, you will find these affidavits in collections cases where default judgments are rendered. Read the affidavit. Find a few more files and repeat the process. Ask the clerk if attorneys charge these rates. Ask other lawyers. You'll have to conclude it is true. They do.
"Okay," you say, "but they give many more hours of their time and bill for fewer hours." This is often true. This is where the rub lies. There are hoards of attorneys out there who just cannot bill for all their time. Sometimes, this is a mental block because a lawyer is incapable of believing he actually deserves that kind of money. Sometimes, the lawyer just cannot believe clients will pay these rates. Sometimes, it is a calculated practice because the lawyer knows the client cannot afford to pay for all the time the lawyer must spend on a case. The previous three examples are prevalent out there in the market. The first two are not justifiable. They only reveal the lawyer's lack of self-confidence. The third is a reality in many cases. You will have to deal with it, but you can minimize this reality and maximize your income by following some basic guidelines which are discussed later. For one thing, the area of law you practice dictates how much of your time you will wind up "giving away." (More on this later).
So, we need to first just go with the assumption, for now, that, "Yes, you can charge for and be paid at the going rate for all your time." Now, it is time for some easy math.
There are 40 work hours in a week. There are 52 weeks in a year. We can deduct two weeks for vacation and round down to 50 weeks. This leaves 2,000 hours in a year. At $200 per hour, this is $400,000 per year. It is a dream come true! But you know, and I know, and you know I know, getting to the point of billing and collecting $400,000 a year is not just a dream come true; it is not easy to do. There is an attorney glut out there in many respects. It is difficult to find enough clients to achieve eight billable, collectible hours every day. However, it should not be much of a problem to procure enough clients to afford a mere two hours a day. This book promised advice on how to earn up to $100,000+ per year while working only a few hours a day. Two hours a day, billed and collected, will get you $100,000.
"Well," you say, "if all that is involved is working four times as much, I'll work eight hours and earn $400,000!" Some attorneys are fortunate and can do that. This book is designed for the more typical experience. We need to focus on the first $100,000. After that, you are set, and you do not need book advice anymore.
In short, if you learned anything from this tiny chapter, the following points should be burned solidly into your psyche if you are going to succeed financially:
- Yes, you are worth the going rate.
- Do NOT try to be a cheap or inexpensive attorney - not even on the pipe-dream of getting volume.
- Bill for all of your time when you can.
- You can bill for all of your time when:
i. your work was as efficient as that which the client could get out of an experienced attorney, and
ii. your client can afford to pay it without undue sticker shock (a little sticker shock is okay).
© 2015, Jeff M