Yesterday was a huge HSD. I received the following email from a sole proprietor attorney who specializes in elder care and estate law:
I tweeted a few weeks ago that I was reading your book, Implementing Value Pricing. Let me tell you a bit about how this began.
I am a Certified Elder Law Attorney (CELA) and today limit my practice to elder law and estate planning, with the exception of Residential Real Estate Settlements, something that the previous attorney that practiced here did and I continued doing it.
At all times I had my eye on limiting my practice since taking over this firm in 1995. I have stopped doing divorces, civil litigation, landlord-tenant, all the types of “threshold” law that I inherited.
This year I am moving the real estate practice into a stand-alone settlement company with another attorney that he will manage, leaving me to fulfill my goal of simply being an elder law/estate attorney!
As part of this, I have been reviewing all my firm practices. That led me to Atticus and Atticus led me to you and VeraSage! I had been using fixed fees for a while because I have always hated keeping a timesheet.
When I was a 2nd year law student clerking at a litigation firm, I was taught how to do a timesheet before anything else! Further, I wasn’t very good at it. I would find myself trying to go back and recreate timesheets for the client or the Court. Yet, it was not until reading your book and listening to the audio recordings that I knew that fixed fees were not enough. It’s all about VALUE and I was leaving money on the table!
A few weeks ago my secretary placed a stack of old files in my office for review. One was from January. I had met with a gentleman about asset protection planning, specifically sheltering assets from the cost of long term care costs in the future. I had quoted the fixed fee range and he had “sticker shock.” The next day he called back to say he did not wish to go forward. When I saw his file two weeks ago, I figured I would put value pricing to the test.
I wrote the gentleman the attached letter [see below]. Within two days he had made an appointment and yesterday, he wrote the check for $11,250! This is trust planning that I had been charging a fixed fee of between $2000-$2500.
I can’t thank you enough for your books, speeches and blog posts! I will continue to let you know how the implementation of value pricing progresses in my solo practice.
Here is the letter he sent to the customer. It’s an excellent example of communicating value and handling sticker shock:
July 5, 2012
Re: Asset Protection Planning
Dear Mr. X:
Upon reviewing files, I came across yours. I realize you had previously decided not to move forward, I just wanted to touch base one last time to complete my due diligence.
If I recall, you were concerned about the price of my services. I realize some clients have “sticker shock” when such a price is quoted, but if one balances that with the value the client receives, all previous clients have moved forward.
The one certainty is this: if you require long term care, recent surveys by Met Life reveal that in our area, the average cost of a semi-private room is $198.00 a day and a private room is $225.00 a day; that translates to $72,088.00 and $82,125.00 annually for long term services. Knowing these costs, it then simply becomes a matter of how long you live in need of assisted living/nursing home care. You can see, at approximately $6,000.00 or $6,800.00 a month, my fee is less than two months of care.
For example: three years in assisted living would cost approximately $125,325.00. Three years in the nursing home would be about $234,000.00. Thus, if you saved a mere two months from needing private pay, it would more then pay for the value you receive.
Think of it this way, if you knew an investment of $11,250.00 would yield an return of almost a quarter of a million dollars you would certainly make the investment!
Of course, the choice is up to you. If we do not hear from you in 30 days, we will close your file and wish you the best!
Very truly yours,
This is what amazes me about attorneys, and consultants, who continue to denominate everything into hours. How could he have received a price nearly $9,000 over average hourly rates by focusing on realization rates and not value?
Will this job be profitable? Does he need timesheets to know this with certainty? Give me a break. As we’ve said a million times, focus on value and time becomes superfluous.
Congratulations to this attorney for being willing to try something new, and thank you for letting me share the story with the VeraSage community.