Most fee-earners wanting to increase their fees should start by reducing their case-load!The vast majority of solicitors are overworked.
The last time they were up to date was the first day of their articles.
But still, they often struggl e to convert all of their time into fees.
They worry about where future work will come from, and yet cannot remember a time when they were completely on top of their case-load.The ideal is that every file will be driven hard, that it will be controlled by one's own client and his or her legal adviser - not the 'opposition', that every letter and telephone call will receive a reply today, and that the file will reach a speedy conclusion with no time wasted to the profit of client and lawyer alike.How should solicitors know when they are overworked? The answer is surprisingly obvious: at the end of an 'average' full working day they should go home completely up to date.Occasionally this will not be the case - indeed, if they go home up to date every day they may find they have too few files.
The times when they do and do not should roughly balance.This should result in the maximum possible attention being given to any particular file, and ensures that nothing is left until tomorrow when the client would benefit by it being done today.To have the right amount of work, they must have no more and no less than approximately the correct number of files.
It is a fairly simple task to calculate the 'correct number' of files.
The important thing to remember is that we are dealing with averages, which never happen, but are a vital planning guide.The answer lies in time costing techniques.
If, as many firms do, one intends to charge out six hours a day, or 30 hours per week, this will result - after deducting two weeks for bank holidays and four weeks for vacation and sickness - in 46 weeks, or 1380 chargeable hours, per year.
A direct multiplication by a charge-out rate of, for example, £90 per hour shows that this should produce £124,200 pa; at £65 per hour, £87,750 pa.
Do you recover this?We now need some statistics on which to base the calculation; examples will be provided after the questions.-- How many chargeable hours should a properly run case of the type with which you commonly deal take to complete? Ten hours? 15 hours?-- How long should the average case take to complete, assuming you had the time to pursue the case vigorously? Nine months? A year?Suppose a properly run file takes ten hours to complete over nine months when dealt with promptly at all stages, and reasonably thoroughly, at a charge-out rate of £90 per hour.
There are only 1380 hours at most to charge in the year (if six hours per day is correct).In an average year, then, to recover £124,200, 138 cases must be finished at ten hours each at £90 per hour, or 11.5 cases per month.
This will be true whether one's average case-load is 400 or 800 cases.
At least 11.5 cases per month need to be opened to maintain the equilibrium.
Not many, is it?Next, how many files we need to have at any one time to ensure we maintain this closing rate must be calculated.Starting from scratch, 11.5 cases will be opened on average every month, and they will remain open for nine months until closed.
Each month for nine months we will add 11.5 files until the ninth month, when the same number of cases will be opened and closed.
Thereafter an equilibrium is maintained.
By then, 9 x 11.5 = 103.5 cases will have been acquired.
Anything more than this is utterly unproductive.
It will not increase a fee-earner's annual fee income by one penny, all other things being equal.In fact, the contrary is true since several things will suffer: the average length of time a case takes will increase since there will be less time available per file contrary to the best interests of the client, hence two or three year files; more time will be spent 'organising' ourselves, thereby spending either unnecessary time at the office or eating into chargeable time; stress, headaches, heart attacks, marital problems, sleepless nights etc; and fees will drop.The message is now probably clear to those solicitors who have been carrying out their own calculations: you have too many files! 'I knew that!' is the reply.
But what is the solution? Colleagues are probably as overworked as you, so files cannot be passed on.
There are two possible solutions.
First, refuse work.Second, take on a trainee solicitor or assistant solicitor.
Train and supervise the new staff member by giving him or her his or her own files gradually over, say, three months until he or she also has 100 files.
He or she should find this manageable and you will have more time to supervise him or her.In time he or she will justify his or her salary by closing 11.5 cases per month - albeit at say 75% of the charge-out rate - which, when added to your cases closed, will double output and multiply fee income by 1.75.
And 1.75 x £124,200 = £217,350 - an extra £93,150!There is a massive shortage of places for articled clerks, and a huge number of over-stressed solicitors losing sleep over too much work.By combining the two, both problems can be substantially alleviated.
For happier clients, a quieter life and an extra £93,150 per annum, is it not worth experimenting?
No comments yet