The death of the billable hour has been anticipated by legal innovators for years, even decades, but somehow this antiquated fee structure still hangs on. What is it that has so deeply entrenched the billable hour in the practice of law? What will finally move the profession to accept an alternative? Jared Correia addresses these questions and more with Scott Clasen. They delve into lawyers’ fears about leaving the billable hour and offer insights into how flat fee structures can actually increase profitability and improve client relationships.
Scott Clasen is director of marketing at TimeSolv Corporation.
Special thanks to our sponsors Scorpion, Nexa, TimeSolv, and Abby Connect.
Building Flat Fees That Actually Work
Intro: Welcome to Legal Toolkit bringing you the latest legal trends and business initiatives to help you manage your law firm with your host Jared Correia. You are listening to Legal Talk Network.
Jared Correia: Hello everybody. Welcome to another episode of the award-winning Legal Toolkit Podcast here on Legal Talk Network. If you are looking for The Lost Village of the Smurfs, just look inside your own heart. If you are a returning listener, welcome back. If you are a first time listener, hopefully you will become a longtime listener. And if you are Larry Bird, you are probably trying to suppress all those 1980s photos of you wearing short shorts or at least that’s I think what Larry Bird is doing right now.
As always, I am your show host, Jared Correia, and in addition to casting this pod, I’m the CEO of Red Cave Law Firm Consulting, which offers subscription-based law practice management consulting services for law firms, Bar associations and legal vendors. Check us out at redcavelegal.com.
I am also the COO of Gideon Software, Inc., which offers chatbots, a first-to-market chatbot builder and predictive analytics created specifically for law firms. Find out more at www.gideon.legal.
You can also listen to my other other podcast; yes, I have another one, that one is called The Lobby List. It’s a family travel show I host with my dear wife Jessica on iTunes. In fact, she is away on a cruise right now leaving me with our two charming children for the week. Subscribe, rate and comment on that show, it will make these weeks when I have my children solo that much easier.
But here on The Legal Toolkit we provide you with a new tool each episode to add to your own legal toolkit so that your practices will become more and more like best practices.
In this episode we are going to talk about a really practical subject for lawyers which is Building Flat Fees That Actually Work, right? But before I introduce today’s guest let’s take a moment to thank our sponsors.
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TimeSolv is the number one web-based time and billing software for lawyers, providing solutions since 1999. TimeSolv provides the most comprehensive billing features for law firms big and small, www.timesolv.com.
All right, we are back. My guest today is Scott Clasen, the Director of Marketing at TimeSolv without the e. Prior to that he was the Director of Marketing for the National Sports Center in Minnesota. He has also been a teacher.
So Scott, welcome to the big show.
Scott Clasen: Thanks Jared. I am happy to be here.
Jared Correia: Do you get that a lot where people say TimeSolv without the E; I just wanted to make that clear?
Scott Clasen: Yeah, because when you are saying and talking about it, it’s not obvious, right, but when you see communication from us, but yeah, I think it goes back to, there actually is some other entity that owns the domain name, TimeSolve the way you normally spell it .com. Went out of business years ago and we have reached out numerous times to try to contact them to acquire that domain name and have been unsuccessful. So yes, it has been TimeSolv without an e since we were born 20 years ago now.
Jared Correia: No, this is like a real problem. I remember like back in the day the Rams, the LA Rams, the sports team, they couldn’t get the URL rams.com because like some dude who really liked rams had a website set up with like pictures of the animals and he would like not sell to the NFL.
Scott Clasen: Well, I will tell you, if we have time later, I don’t want to get too far off the tracks here, but —
Jared Correia: You can go down the rabbit hole a little bit. Go ahead.
Scott Clasen: I have a fine story about the domain name SOCCER.COM.
Jared Correia: Oh perfect.
Scott Clasen: Which as you can imagine is worth millions of dollars as a domain name. You mentioned I used to work at a facility called the National Sports Center in Minnesota and it’s the biggest soccer complex in the Western Hemisphere; it’s like 52 soccer fields up there.
Jared Correia: That’s crazy.
Scott Clasen: And we hosted the biggest youth soccer event in the Western Hemisphere; it was called USA Cup, it has like a thousand youth soccer teams with a lot of sponsors that obviously want to be associated with that event because of the sheer numbers.
So one year one of our apparel sponsors was SOCCER.COM and Eurosport I think is the actual name of the company. And so the guy who came and worked with us, we are chatting during our first introductory meetings and I said I have to ask this question, and this was only about maybe six years ago, I said I have to ask the question, what is SOCCER.COM worth as a domain name? And he just sort of gets this kind of Cheshire grin on his face and says it’s worth about $2,495 a year or whatever we had to pay for it.
I mean he tells the story that SOCCER.COM, they used to be a pure mail order catalog company and they had a guy — so they were around back in the 70s and 80s doing mail order catalog of soccer gear and they had a guy who was in the Army and they are located in North Carolina, guy who was in the Army in the first Gulf War in the early 90s, came back after the Gulf War and he said to them, he said, you know look, we were using this thing in the military that was like all the computers are connected, it’s called the Internet and they had these like names you can buy. I think it’s going to be something kind of big.
So you can register these names and I think SOCCER.COM. So they registered it like in 1992 or whatever it was and obviously had the foresight. And he tells the story about the very first online ordering system, there was one page when you went to SOCCER.COM, it essentially was a page that you printed to fill out your order and then fax back to the company like in ’93 or ’94 or whatever.
So cybersquatting, all of that, is the real thing.
Jared Correia: That’s really funny. I just went to SOCCER.COM now; the website is a little bit nicer than it used to be.
Scott Clasen: Right.
Jared Correia: No, that’s funny, like talk about getting in early and the dude who probably set that up is probably long gone from the company, so imagine.
Scott Clasen: For sure. Yeah, no equity in that name.
Jared Correia: He doesn’t even know we are having this conversation.
Scott Clasen: Yeah, right.
Jared Correia: All right. Well, you are a soccer guy so let me ask you, I have got later questions for you about world history; we are going to save that for the end of the show.
Scott Clasen: All right.
Jared Correia: In terms of soccer, you are like a soccer guy so I know people have preferences on this, like what’s your favorite league, what’s your favorite team and are they in that league?
Scott Clasen: Right, right. Well, kind of yes, kind of no. I mean I do follow the English Premier League pretty closely and Tottenham Hotspur are my favorite team, because at this soccer event that I mentioned that I used to work at Puma used to be a sponsor as well before Eurosport and SOCCER.COM and they brought the Tottenham Hotspur youth team to our event years ago before I was ever following English Premier League soccer, so that’s how I kind of got to — and they sent their entire — like I was working in the marketing area there and they sent their whole branding guidebook for Tottenham Hotspur and I had never heard of them before, so I was just really intrigued by them. So they are my favorite team here, but as well here, I mean really truly my favorite team is Minnesota United in MLS.
Jared Correia: Oh, all right. You are legit.
Scott Clasen: Well, yeah, they actually train at the facility where I used to work and they used to be a Minor League team back — there were several iterations of this team going back to the early 90s and in 2009 they went belly up in the Minor Leagues and we as our organization as a nonprofit took over ownership of the team and ran this Minor League soccer team for one year in 2010. And I ran the website and helped do the production of our webcasting and so on and then we handed over controls to what eventually became what is now Minnesota United.
There is this beautiful new stadium in St. Paul and the team has just done a really great job in branding; they have one of the best logos in all of sports and I feel like —
Jared Correia: That’s interesting. Now I want to look at it.
Scott Clasen: I have a little piece of history with that. That team would not be where it was if our organization and the work that we did that one year hadn’t happened, the team would have folded and probably wouldn’t be MLS in Minnesota.
I mean I still know the general manager, he used to have his office; he is still the general manager. He was the GM back when we ran the team, still there today. I mean his office was right next to mine, so I got to know him, talked about his kids. So I have a very personal vested interest in Minnesota United Soccer.
Jared Correia: Oh, that’s really cool. So the logo is a loon, right?
Scott Clasen: Yeah, yeah. It’s a great logo.
Jared Correia: Yeah, it’s pretty cool. I like that a lot. See, I am going to get eviscerated for this, but I have just never been into soccer, like it’s not my thing and I don’t understand like the whole FC thing, right?
Scott Clasen: Yeah, Football Club, whatever, yeah.
Jared Correia: I figure that is like a parent anyway, right? It’s not like you have the New England Patriots Football Club necessarily.
Scott Clasen: I think part of it is there is — especially over in Europe there are sporting clubs that are — there are multiple sport clubs, like I know and I am — Barcelona, like one of the most famous soccer teams in the world, they have a basketball team, there is a Barcelona professional basketball team.
Jared Correia: That makes sense.
Scott Clasen: So I think that’s where it came from. In the US we just like to bastardize and try to steal from the Euros and everything.
But I am with you, soccer was not my thing. I grew up a traditional American football, baseball, basketball kind of guy and it’s just like kind of grown on me over the years. I love watching soccer now more than I do American football, which has been like kind of head spinning for me.
Jared Correia: I feel right now I should say that my son really loves soccer and he scored four goals in this last game, so he was very proud of that. So now he gets the podcast shout out.
So I think we have done probably enough soccer talk at this podcast.
Scott Clasen: Probably.
Jared Correia: Shall we talk legal?
Scott Clasen: Let’s do it.
Jared Correia: All right. So I think this is a really interesting topic, fixed fees for lawyers. Everybody has been saying for years that the death of the billable hour is coming, right, since like ’99. So why is the billable hour still so entrenched in legal when everybody is just waiting for it to go away in theory?
Scott Clasen: I think it really is that fear and tradition. There is that fear that law firms have that they are going to lose money, lawyers in general we can all agree tend to be a little bit more risk-averse than the general populace and there is a lot of —
Jared Correia: You don’t say. No, I have heard that before.
Scott Clasen: Yeah, and technology averse perhaps too to some degree, right?
Jared Correia: Yes, yes.
Scott Clasen: And there is just that — I mean think about traditionally what do lawyers do when it comes to researching cases, they look for precedent, right? I mean that’s kind of like the backbone of our legal system is what is the previous decided history of this legal matter that I am looking into to serve as precedent?
Well, billing is kind of the same way, like what do we look to, what has traditionally been done. Well, we billed by the hour.
So yeah, there is a lot of talk about it, but I sometimes feel after being in this industry like I have now for like four years that there is a lot of people that talk about it, but I think they all talk amongst themselves, and a lot of the rank and file lawyers and law firms really haven’t thought long and hard about should I be changing my way of billing customers from the model that I and my firm and my associates, my partners have known for decades.
Jared Correia: Right. I think there is like an echo chamber effect to a lot of this as well, like the people who talk about it are the people who talk about it.
Well, let’s just dive down a little bit, because I think part of it is traditionalism. I think part of it is that the legal field is very provincial in some ways. So what about practical problems that are associated with billing by the hour, because that’s another way to pitch it is like it is nontraditional, but there are also issues with hourly billing that are hard to overcome or impossible to overcome. So what do you see in terms of law firms’ hourly billing and issues with that model?
Scott Clasen: Well, the first one again, you and I are not going to be breaking new ground on any of this. I mean it’s — when you read about it and you look at it, I mean the first thing is the hourly billing model doesn’t provide any incentive to be efficient in your work and that’s the one obvious thing that hey, I am going to get paid more if I spend just more time on this task, of course I am going to spend more time on this task.
And that trickles down then and I think we talked just a few seconds ago about technology, I think that’s a direct correlation to why I think a lot of the firms have been reluctant to adopt newer technology, because technology generally means efficiency. You are going to be able to do things — think about the way research is done in the legal field, every law firm used to have stacks of the Westlaw books that they had to go and do their research and now it’s just a few clicks away, saving them lots of time which, there was probably grumbling when everything became digitized and how you can do your legal research because it’s efficient.
And the other thing too that it doesn’t promote the best use of resources within your firm and law firm needs to take a look, is there something that we are charging — our partner who is doing who charges $500 an hour that that same task could be accomplished by a paralegal who charges 150 or whatever the case may be and not using — instead that partner charges $500 an hour. They should be doing the high flying, the 30,000 feet kind of like hey, this is what I am — you could almost use the equivalent, they are the pilot, right, they are highly skilled in flying a plane, why are they handing out the peanuts in the back of the plane. It’s not an efficient use of the resources you have at hand.
Jared Correia: That’s a good analogy. Yeah, I have been telling lawyers for years, like practice at the top of your law license, but it’s a concept that’s hard to get lawyers to buy into.
Scott Clasen: Yeah, right, exactly. And then on the flip side for the consumers, obvious, again, like when you ask the simple question, how much is this going to cost and you can’t get a straight answer, that makes you feel very uncomfortable. It’s not a billing model that we are all used to, especially if you are in an area of law where you are dealing with people that don’t have to interact with legal services very often. They are walking into already feeling slightly uncomfortable.
It’s like I just bought a house this summer and it was the first house we bought in like 12 years and diving into that whole mortgage and title and all of that world, I am uncomfortable in it because I don’t live in it very often.
Same thing with legal services, I don’t have to dive into legal services very often so I am already a little bit uncomfortable with this and oftentimes we — especially as an individual consumer, if you had to engage in legal services, there is already a stress level because something has happened that involves the law, that’s stressful to begin with, and then you are throwing this extra curve ball about, wait a minute, now you are billing me completely different.
And again, we are not breaking ground, but the idea is most of us are used to seeing the value for what we are paying for instead of seeing the hours that it took to provide that value. I don’t really care how many hours it took, I just want to see the value of what was done and we will talk more about that later I think.
Jared Correia: No, that’s a great point. I think this consumer discussion is fascinating and we will get to that in more detail in part three of the show, but let’s return to this notion of like lawyers being afraid to move to alternative fee structures.
One thing that we haven’t talked about explicitly is like I think there is a real fear for lawyers that they will undercharge their clients and not value their work appropriately, because you are right, when it’s hourly, if you feel like you have value to work appropriately, you just do more work, add more hours, but if you have promised somebody a price, you have to stick to that, right. So how can lawyers get around that?
Scott Clasen: You are right, there is that fear of I am going to undercharge or I charged a flat fee once and I lost my shirt and they might remember that not the three times that they have provided a flat fee and they made extra money. And this is I think the background of what we want to talk about today is how do I set a fee that I know is going to be profitable, that I know I have confidence in that will make me money. It will be a long — you can make it longer hourly rates in many ways of what you normally charge.
Lawyers just don’t know how to do that. They have never been taught how to go about creating that fee with a lot of forethought before they just throw out a number and that’s what we do. At TimeSolv we have these tools built into our system. It doesn’t really matter if you use TimeSolv or any other time and billing system, but it’s the idea of coming up with a flat fee that you feel confident. There are tools and a skill to do that that are achievable by every lawyer out there.
Jared Correia: Right, I think that’s certainly true. Now, let’s pause there, because we are going to return to this discussion after the break. We are just going to tease how you actually create a profitable flat fee.
So we have reached the end of the first part of our show, let’s take that break I talked about and then come back after some words from our sponsors.
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Jared Correia: All right everybody, thanks for coming back. I have returned from my fact finding mission, so let’s get back to our conversation with Scott Clasen of TimeSolv without an e.
We are talking about how to create and manage fixed fees in legal. So Scott, we left off talking about this fear that lawyers have to create flat fees, fixed fees, because they are worried about undercharging.
So $20,000 question or more I suppose, how do you create a fixed fee structure that is actually going to be profitable for a law firm?
Scott Clasen: What it comes down to Jared is taking the tenets of what a lot of other industries have been doing for years and applying it to your matter before you do the work, and it’s just project planning, project management, something that architecture firms, engineering firms, construction firms have been doing for decades. And the concept is really pretty easy when you stop and think about it. It’s just actually applying it and putting it into practice.
Say for example, let’s use the example that I am a family lawyer and I do estate planning; I have been doing it for years, I just kind of have it down. I know everything that has to be done for my client. I do will preparation. I prepare trust documents and I do whatever, the work for probate avoidance when somebody passes away.
Well, I just named three phases to my project; will prep, trust prep, probate avoidance, okay? Phases and tasks, that’s what project management is about.
So what I think you need to get in the idea of is lay out all the phases of the work that has to be done to achieve the conclusion that your client wants. Once you have those phases laid out, determine what are the each individual task within each phase.
For will preparation, there are two things I always do. I always gather family information and I always do an asset evaluation, okay, great. Those are my two tasks let’s say. I am going to simplify this obviously for the sake of our discussion.
Once you have those into place, okay, who at my firm is going to be doing the gathering the family info, and this can go back to that resource allocation, like do I need to do that as the $500 an hour attorney or can that be done by my para, but the point is you assign it then to the people who are going to be actually doing the work and say it’s going to be my para.
You assign them that task, then the next important step is, budget their time for that task, how long are you going to give them to do that gathering the family info, hour-and-a-half, two hours, three hours, and you know — just by based on experience you may not know the very first time out of the gate if you’re a brand-new lawyer or this is a new area, but you’ll figure it out quickly enough. You can do a good estimate.
You assign the person to that task, you assign the hours to that person, then it’s just a matter of doing the math. Okay, well, I’m giving them two hours to do that task and she normally charges $150 an hour, well, that’s $300 is going to be going towards that particular task. You do that for the next task, assets information, and then into the next phase and so on.
Every task you create put a budget of hours to accomplish that task, assign it to a person, multiply it by their normal hourly rate, roll it all up, you now have a fixed fee you can charge to your client with confidence that it will be profitable, and here’s the key takeaway.
And again, this is nothing new. The US Navy did this back in the 1950s, it’s called PERT (Program Evaluation Review Technique) and it’s just these charts that was used by the US Navy to manage the creation of weapons and defense projects. It’s just taking tasks within a project and coordinating the team members that have to be in place to accomplish that work.
Once you have this — I’ll talk a little bit later about the expectations of how do you meet the expectations of the client, but one is, I could show this plan to my client ahead of time. You don’t necessarily show them the hours that you’ve assigned or whatever the case may be, but you can show them like here’s everything we are going to do to achieve the outcome that you want. Here’s the value that we’re providing, it’s going to cost you $4500, whatever the case may be as you roll up that whole budget.
There’s some important parameters around that once you get that budget into place, but that’s in essence the way in which lawyers can do this ahead of time before they start to work on the matter. The beauty of that is once you do it once, you have a template in place, reuse that template. You don’t have to reinvent the wheel every time you have a new matter, you can tweak it, and guess what, you’re eventually going to get more efficient at it, so with that gathering family info that you’ve rolled up a budget of two hours, $300, $150 times 2, maybe that para now has gotten so good at it and it takes for an hour-and-a-half, but you’re still able to charge that $300 task if you will, because that you know is a good fixed fee that is acceptable to the consumer, and now you’re even getting a higher profit off of that work than previously.
Jared Correia: That’s awesome. I liked how you laid that out in such practical fashion like that’s a good playbook for law firms, especially doing this the first time.
Now some of the stuff you’re talking about there, right, workflows, assigning work to people, technology comes to play a role in that, as well as like actually billing out the fixed fee.
So can you talk a little bit about the role that technology can play in implementing these practices?
Scott Clasen: It’s hugely important. I mean, you have to make sure — I mean it’s one thing to have a tidy little plan with tasks and time assigned to the associates, but it all becomes kind of a moot point if you can’t accurately track against the plan in real-time.
I mean, it should go without saying that, if you’re charging a flat fee you still are going to want to track the hours that you’ve worked, to make sure that it was profitable. You need to make sure that it’s tracked in real-time as well so you don’t have these uh-oh moments and TimeSolv has this all built into our software, but like I like I mentioned it really doesn’t matter, you could use lots of different types of tools out there; project management tools.
With TimeSolv, the beauty of it is — it’s all right built into the billing component of it as well, but you can see like, for example, if we set out a task and I assign somebody in TimeSolv who works for my firm two hours to work on that task and they try to make a time entry of 2.25 hours against that task. They will either can get a warning saying you’ve exceeded your budget or you could lock them out completely and they can’t make that time entry at all, then they have to do that walk of shame down the office to whoever the project manager or the responsible attorney and say, I have an issue. Now you have that issue in real-time.
This is also a great way for — again, to communicate with your client. If an issue does come up something went over budget in the time allotted, you can have a discussion with your client about it as it’s happening rather than just have it be placed on a bill three weeks later, and oh, yeah, well, we went over on what I thought it’s going to take to do this, so here’s your bill. That’s not a great way to communicate with your client.
Jared Correia: Right. The walk of shame, I’ve done many of those.
So we’ve talked about the layout, we’ve talked about how you set this up, we’ve talked about the tech. So how does the application of fixed fees when in a law firm change outcomes for the firm?
Scott Clasen: I think firms — if they are leveraging project management as a way to determine their flat fee, they are finding that they now have a full view of what matters can be more profitable than others, kind of what I just alluded to when talking about, hey, somebody spent only an hour-and-a-half now on that task, that I budgeted two hours for, the rest is, that extra half hour is higher profit.
So they’ll be able to get a clearer understanding like what matters are more profitable to us and perhaps other areas, and they also learn how to allocate the resources better as I mentioned before.
Jared Correia: Right.
Scott Clasen: You have the right people in the right seat doing — they’re in the right role, and that’s, again, this is kind of business model type stuff that talking about making sure you have the right people in the right seat but you’ll be able to I think learn more about that if you put into play the idea of managing your matters like you’re building a building, like you’re building a house. It’s all about making sure that the electrician isn’t showing up three days earlier than they’re supposed to and when the electrician does show up, they’re getting everything done in a timely fashion that they said they were going to as a subcontractor.
Jared Correia: Right. Yeah. It should all be a great big symphony, right. I think this has been great advice for law firms and we’re going to take one more show break and then we’re going to what this looks like for consumers, because law firms and consumers generally have a pretty big disconnect. So I think looking at this from the consumers’ perspective rather is really important. So let’s listen to these words from our sponsors one more time and then we’ll be back.
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Jared Correia: All right, thanks again for staying with us. We’ve entered phase three of the podcast. We continue to talk with Scott Clasen of TimeSolv, who’s been educating us on alternative fees and fixed fees for law firms. So let’s find out more. So Scott, we spend a lot of time in this show talking about law firms and how they can implement fixed fees. You alluded to legal consumers before. Can you talk specifically about the issues that legal consumers have, paying hourly rates because as you mentioned previously like that’s not how they pay for anything, anymore, in any other industry.
Scott Clasen: Right, I mean, think about contract and legal services not like getting your car fixed but think about — when you go to the — when you go to a dealership and you got to drop off your car, it needs some work done. They quote you, okay, this is how much it’s going to cost and most times they not only do they tell you that though, they present to you a line item of where all the costs are coming from, the parts and the labor, and they can estimate that to change those brake pads, the pads themselves cost, whatever $200, the labor is going to be $500 or whatever because I know it takes my guys, our mechanics take 1.5 hours, multiply that by what their normal hourly rate might be and that you can see it all, you can see where the costs are, and I mean we’ve all — it’s kind of you would all chuckle at it but then if something comes up during that work, then you get the phone call from the dealership saying, yeah, say we were doing the brake-pads and we notice that one of the rotors on the left right is pretty worn down and probably should be replaced now, maybe later. You want to do that, now you can have that conversation at the time.
Same thing with the legal services, if there’s filing patents or whatever and there’s opposition that comes up and all of a sudden it’s going to take a lot more work than you realize what you originally quoted in your fixed fee then you have the conversation and talk about, well, I’m not sure, it’s going to probably take me three hours to deal with this issue so that’s probably going to be an additional $600 of accrued fees, just so you’re aware, do you want to do it and you have that transparency with your client.
I mean, I think about like when my father-in-law passed away about five years ago and I live in Minneapolis, my wife’s family is from southern Wisconsin. We didn’t know anybody down there anymore and she was the executor of the estate. We had to — she had to go through all of the things you have to go through to, essentially closeout the estate. We didn’t have a clue, we had that stress, I talked about previously, like we got to figure out the legal process of this. Luckily, we found a lawyer down there who presented just a flat fee.
Here’s what’s going to cost to do the work, but he did a great job. He is a great example that I use all the time. He did a great job of explaining, here’s all the things that we have to do and so here’s all the work I’ll be doing, the filings and so on and so forth.
He put our mind at ease. I felt like I was getting value for what we were paying for that and everybody walked away happy.
Jared Correia: Right.
Scott Clasen: And we go back to like, well, how do I figure out that right fee from the lawyer point of view. I love having conversations with lawyers when I am at these legal conferences and when I find out, when I ask, oftentimes I’ll say, like how do you normally bill and when I run across lawyers that tell me, I usually charge a flat fee, my follow-up question is always, how do you calculate your flat fee? How did you come up with a fee that you charge? I’ve heard answers from like, well, one guy told me. I essentially charge what I think I can get away with.
Jared Correia: Well, that’s one answer, yeah.
Scott Clasen: Yeah. He’s like he’s been in the market like 25 years. He sort of just knows the market and I just charge what I think I can get away with. I mean, there’s zero like value that he is showing.
Jared Correia: Right, but the beauty of that is that if they listen to the second part of this show they’ll know exactly how to build the fixed fee.
Scott Clasen: Right, yeah, exactly.
Jared Correia: So one of the things I think is interesting from a lawyer and a consumer’s perspective is, when fixed fees are offered by law firms, how does that change the consumer’s expectations of other getting from the firm? That’s a big deal here, right?
Scott Clasen: Right, and I think that’s a really good question. So let’s talk about expectations because at the end of the day doesn’t every lawyer and every law firm want to meet or exceed the expectations as a client?
Jared Correia: Right.
Scott Clasen: But how do you do this exactly, and to me there’s four main components of meeting, or exceeding the expectations for your client and to make them happy because you want them to walk away happy, to recommend you and to get more referral business and so on. The first step is define those expectations, what am I going to do for you, making sure that you understand their needs, you share with them the detailed plan of action that we talked about with the phases and tasks and so on, then you explain the expected cost. Who’s doing the work? How long is it going to take and so on and so forth?
Here is where the costs are coming, here’s where things might come up. I’m not sure. This is where I mean, again, I think, I know that you’re a total advocate of this that, it’s not like, we don’t live in a binary world with charging people. It doesn’t have to be just hourly or just fixed fee. There can be all sorts of blends together. So that’s where you can — that comes into the managing expectations, is the third level is communicate, communicate, communicate. If you’re not on track, explain why. If you have to go off track and has an additional fee, you explain why. I mean, there can be a fixed fee blend and there’s all sorts of models out there that we don’t necessarily talk about. I know you’ve explained them a lot previously. XP Plus, there’s fee shifting, there’s — you can do, I think it’s called a budget caller. I mean there’s all sorts of things.
And then the fourth thing is then achieve those expected results. So execute the plan, which is oftentimes the missing link, and you can plan all you want but if you don’t execute it, it’s a waste of time and that goes back to that technology threat we discussed where having a plan on paper or on a spreadsheet, in Excel whatever the case may be is fantastic, great first start, but if you don’t execute against that plan and really hold your own feet to the fire on that, it’s a waste of time.
There is an old saying, I can’t remember. I looked it up once, I couldn’t find who exactly first said this, but it’s the idea of Plan the Work, Work the Plan. Technology will help you be able to work the plan and not just plan the work to be successful and to create that happy client whose expectations you have met or exceeded.
Jared Correia: Yeah, so let’s talk about that like — we talked about how this will change outcomes for law firms, assuming all of what you just talked about comes to fruition. How does that change the outcome for the client?
Scott Clasen: Well, I think just to — a lot of what we talked about. For the client themselves they’re going to walk away feeling like they’ve gotten value for what they paid, and again, that’s all we as consumers want at the end of the day is did I get a fair deal?
They also can feel like they were part of the process. They’ve participated in the work because you shared that plan of action. Our CEO tells a great story that he — when he walked into a lawyer’s office, he had to do some legal work with. He sat at the desk across from the guy, the guy had two monitors, one facing the lawyer himself but the other was turned in facing the person sitting at the desk and facing our CEO and they ran through together. They walked through, like here’s all the things I’m going to be doing to make you — to understand that I’m going to meet the expectations that you have, and that’s again all we want at the end of the day.
Jared Correia: Right, absolutely. All right, so I think we’ve had a good discussion on legal fees, fixed fees, clients. Now, let’s talk about some real stuff. You were a history teacher.
Scott Clasen: I was. I was a high school history teacher for four years.
Jared Correia: I love history. Like, I would tell you, if there was more money in it, I would definitely be teaching history rather than probably consulting with lawyers. However, I do enjoy both. What was your specialty in terms of history, like I know every history teacher has like a concentration. What period of history did you focus on and then my follow-up question to that is like, who is your favorite historical figure?
Scott Clasen: It’s interesting. When I was an undergrad getting my degree in History, I focused and did my thesis on Social Unrest of the 1960s. I focused on the Vietnam War and I actually did a look at Black athletes in the 1960s and —
Jared Correia: Oh, that’s pretty cool.
Scott Clasen: The ’68 Olympics with Tommie Carlos and Tommie Smith — oh, I’m getting the names wrong. Yeah, Carlos and Smith.
Jared Correia: Carlos and Smith. For both name, Tommie, I can’t remember.
Scott Clasen: No, well, John Carlos and Tommie Smith.
Jared Correia: Right, right.
Scott Clasen: Anyways, they are the Black fist salute at the Olympics. Muhammad Ali was another focus of mine. He was a fascinating character in those times when you look back at the history, but I really fell in love and where history really grabbed me was around the Civil War. I lived outside —
Jared Correia: Oh, I love Civil War history, all right.
Scott Clasen: I’d live just outside of Washington, DC area when I was a kid and one of those moments that — I don’t want to call it life-changing but really defined my direction or my love for history was when I was 12 we took a trip up to Gettysburg and toured the battlefield and I have two powerful memories from that day. One, is that my older fourteen-year-old sister was the biggest B word you could ever on that, to this day our family talks about, well, how crabby she was.
Jared Correia: I hope you said in a link to this podcast.
Scott Clasen: Right, right, and then but the second was just fall in love with everything revolved around the history and really kind of absorbing everything that happened at that battlefield. So when I was a teacher, my first two years I focused, I was an American history teacher on world history and then in my last two years they had me doing government psychology and economics as well because social studies isn’t just history, right, and so I had my license and everything. But I really, I love everything around Civil War history, it’s just fascinating. I love — I wish when I lived out in the Maryland area, I had got into more battlefields during that time when I was a kid, but that’s what I regret.
Jared Correia: Right, I have to say like, when I was a kid we went on one vacation that I remember to Gettysburg, and I think I would have been more excited about it if we had thrown in like a Disney World trip here and there. Going back now however I would be really fascinated by that, great pick by the way, kudos to you, sir.
Scott Clasen: I tell you and I knew it was my wife, that I met the right person. We had just started dating. I was out in the Philly area for something else and she met me out there and we drove out to Gettysburg and stayed at like a bed and breakfast and spent like two days bicycling around the back roads and she was just as into it as I was. I mean, like just — and I’m like this is the woman for me, like she was right on point with me.
Jared Correia: That’s pretty hardcore. My wife who, again, I love dearly is not as into Civil War history and will frequently walk by me and say, are you watching another stupid documentary? To which I say, yes I am.
Scott Clasen: Hell, yes I am.
Jared Correia: This is a podcast about implementing fixed fees in law practice, and we’ve been talking with Scott Clasen of TimeSolv, that’s TimeSolv without the “e”.
Now I will be back on future shows with further insights into my soul, the soul of America and the legal market.
If you’re feeling nostalgic from my dulcet tones however, you can check out our entire show archive anytime you want at legaltalknetwork.com.
So again, it’s been Scott Clasen of TimeSolv, who’s been our guest today, and thanks Scott for making an appearance.
Scott Clasen: Now it’s been a blaster, I appreciate it.
Jared Correia: And I should say, TimeSolv is also a sponsor of this podcast. So let me thank you directly for that as well. Without our sponsors there would be no show and I would have nothing to do for this hour.
Scott, can you tell everybody how they can find out more about you and also about TimeSolv?
Scott Clasen: Yeah, TimeSolv we’re web-based software, time and billing project management obviously. We’ve been around for 20 years now as that web-based entity. You can find us at timesolv.com, without the “e”, start a 30-day free trial with our software. You can — you spend — get a whole month to kick the tires and make sure it’s going to be the right time and billing solution for you.
As far as me, I’m on LinkedIn, I’m on Twitter @ScottJClasen. Although you’ll be warned that you’ll mostly just see like soccer tweets from me, more than anything else. I’m not as socially media active as others so that’s just the way I tend to live, I guess.
Jared Correia: Check this man out, look at this stuff. Learn more about the Vicksburg campaign, et cetera.
Scott Clasen: Grant was a genius there.
Jared Correia: That’s right. For more Civil War talk, reach out to Scott Clasen of TimeSolv. So thanks again, Scott, for coming on. It’s been a real treat, and finally, thanks to all of you out there for listening.
This has been the Legal Toolkit Podcast where it’s always on like Talky Talk.
Outro: Thanks for listening to Legal Toolkit, produced by the broadcast professionals at Legal Talk Network. Join host Jared Correia for his next podcast covering the current business trends for law firms.
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