Setting your rates is a combination of multiple factors including:
- Firm size
- Specialization/type of case
Look at what others in your area are charging, and assess the type of setting you’re in. Rates in large cities will be larger than those in suburban or rural areas. See what others nearby are charging to get an idea of competitive pricing. For more insight as you conduct your research, check to see if your state bar association puts out any information regarding attorney billing data, such as the State Bar of Arizona’s annual economic report.
Once you have an idea of what rates look like in your area, you’ll want to also evaluate how much you want to make a year, how many hours a week you’re willing to work and what non-reimbursable business expenses cost. Typically lawyers only spend one-third of their time on billable hours and take two weeks of vacation a year. Based on these numbers, you can use an online calculator or manual process to determine what your hourly rate should be.
After calculating an hourly rate, you should compare it to the initial research you completed to make sure your rates are reasonable. If your rate is significantly higher than others in your area you may have a hard time finding clients willing to pay. However, if you have a particular specialty or renowned reputation, you may be able to charge more for your expertise.