Setting competitive rates as a legal freelancer
By Tina De Maere – July 31, 2024
If you are offering services (or planning to) as a legal freelancer, one of the most crucial decisions you’ll make is setting your rates. While your pricing strategy obviously affects your income, it also has a major impact on how clients perceive your services when comparing freelancers.
Striking the right balance between competitive and fair rates can help you attract clients while ensuring that you are adequately compensated for your expertise. Here’s a comprehensive guide to setting competitive rates as a legal freelancer.
Understand your market
Before setting your rates, it’s a good idea to check out the competition. Start with researching what other legal freelancers with similar expertise and experience are charging. Don’t be afraid to test your rates and see what kind of clients – and how many – you attract with a lower rate versus a higher rate.
Next, there are a few interesting factors to consider. For example, the geographical location of rates can vary significantly based on location. Your specialization has a major impact on your rates, think for example about areas as intellectual property or corporate law, which may command higher rates. Finally, your years of experience and the quality of your portfolio can influence your rates.
Calculate your professional and personal costs
To make sure you can survive as a legal freelancer, you need to figure out all your costs, both direct and indirect and professional and personal. There are many costs you might not think about such as office supplies, software, and bookkeeping costs. Don’t forget your personal living expenses, such as rent, utilities, and groceries.
Remember, you also need to keep into account unexpected costs like medical bills for you or your pet or your car breaking down.
Determine your desired income
Next, decide on your desired annual income based on your financial goals, lifestyle and possible future expenses.
Break this down into a monthly or weekly income target. This will help you understand how much you need to earn per hour or per project to meet your goals.
Choose a pricing model
Legal freelancers typically use one of three pricing models: hourly rates, flat fees, or retainer agreements. Of course, you don’t have to stick to it and can determine this based on the project at hand.
- Hourly Rates are common for tasks with uncertain time commitments.
- Flat Fees are suitable for well-defined projects.
- Retainer Agreements are a good deal for ongoing relationships with clients.
Communicate your rates
Step 5 is to communicate your rates to project managers and businesses. Try to make it so that the rates you set reflect your expertise and the value you bring to clients.
It’s better to start with slightly higher rates and offer occasional discounts than to underprice your services. You can also give discounts for larger projects or return customers.
Learn to negotiate your rates
When discussing rates with potential clients, focus on the value you provide rather than just the cost. Highlight your expertise, past successes, and the benefits clients can expect from your services. Being able to negotiate your rates and communicate the reason for them effectively, can help justify higher rates and help you stand out from competitors.
Review and adjust regularly
The legal market keeps changing and is very diverse. Some fields are much more competitive, while others have a much lower demand for freelancers. It is important that your rates reflect changes in demand, your growing expertise, and inflation.
Regularly review your rates and be prepared to adjust them as necessary. It is also important to stay transparent and communicate any rate changes to existing clients well in advance and provide justification for the increase.
Conclusion
Setting your rates as a legal freelancer requires a careful and calculated approach and can be harder than you might think. Make sure you understand your market and accurately calculate the personal and professional costs you might incur. Also, remember to communicate your value well. Tell prospects what you bring to the table and review your rates regularly.
Limine is the perfect platform to help you find your next project. Make a free account and get matched with businesses looking for freelancers. Limine makes it possible to negotiate your rates directly with (possible) clients.