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Channel: Small Firm Innovation » Sapna Mahboobani
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Breaking the Time Barrier

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In today’s legal environment where the billable hour has taken a beating, lawyers are looking (or should be looking) to other billing alternatives for their services. Breaking the Time Barrier, by Freshbooks CEO Mike McDermont is a short, simple e-book that explains one method of alternative billing that most lawyers would do well to apply.

The book touts the virtues of fixed-fee billing, and provides a methodology to determine what your fees should be. Most service providers, when asked to quote a flat fee, base this fee on an estimate of the number of hours times their hourly rate. While this is a relatively simple method, there are down-sides to this such as capping your earning potential for any given year to the number of hours you are able to work for that year, errors in time estimation and unfair billing, especially in a profession that relies on precedents from previous matters.

Value-added billing is a happy medium that allows the service provider to bill based on the value that they are providing their client.  By fixing fees based on the value the customer perceives she is getting, both service provider and client can walk away from the relationship with a win-win situation. Value-added billing also removes the unfairness in billing by the hour where a subsequent client is billed less because he benefits from experience and precedents gained from working with prior clients.

I won’t give away the plot of the book. It takes less than an hour to read, but in the hundred pages or so (I read this on my e-reader, so don’t really know how many pages), there were many a-ha moments and ideas on how one can bill for their various services and present these to the client.


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