Ugatti: Lawyers not in charge of fee discussions
Lawyers need to boost their feelings of self-worth so that they do not crumble in the face of – or even before – client demands about fees, an adviser has urged.
A new methodology developed by Vanessa Ugatti is designed to replace the billable hour with a new charging structure that reflects the value a lawyer creates for their clients, not how much time they spend carrying out the work.
Ms Ugatti – a “true worth” expert – has worked with lawyers for the last 13 years, exploring how and why their fees are often set at a too low a level.
She told Legal Futures: “Lawyers are very risk averse, yet they are very cavalier with money, because they are throwing it away.
“This behaviour is driven by a lack of self-worth within many lawyers, who fear losing the work or the client when they negotiate fees. That is a powerful yet negative motivator. It means they are not in charge of fee discussions right from the start.”
To help lawyers improve their self-worth, and increase revenues, Ms Ugatti has created the ‘True Worth’ triangle, which brings together value, profitability and wellbeing.
“Lawyers can use the triangle to work out how to create maximum value for their clients, how to create the most value for their firm, whilst creating what I call ‘the finest life’ for themselves – with the work balance they need to perform at their best.
“The balance within the triangle is about justice and fairness; fairness to all three parties – the client, the firm and the lawyer.”
Fees are at the heart of the formula, but a greater sense of self-worth also helps lawyers tackle a range of commercial issues, such as invoicing and prompt payment, deciding not to work for overly demanding clients who deliver low profitability, and making sure the lawyers run the firm, not the clients.
Ms Ugatti said every part of the formula has been “tested, refined and proven” within law firms large and small.
She has captured her insights on the link between how much lawyers charge versus the value they create for clients in a new book, How to Get Paid Your True Worth Ethically, Without Selling Your Soul.
Ms Ugatti explained: “Lawyers are always busy, with patterns of behaviour – like a hamster on a wheel, going round and round and round, doing too much for their clients. But when it comes to fees, they are fearful. They don’t have great self-worth, and don’t like to show weakness.
“In the legal profession, self-worth is a real issue. People are highly intelligent and capable, but self-worth has got nothing to do with capability. It’s everything to do with how a person thinks and feels.
“How is it that a lawyer can be fighting tooth and nail in court for their client and then be a bumbling idiot when it comes to talking about fees? And yet it’s the same person.”
In firms across the UK, she said, she has seen how a lack of self-worth leads to discounts being offered before clients complain that fees are too high, or lawyers agreeing to do additional work for free, through fear of losing a client or thinking that discussions about scope creep are awkward.
Ms Ugatti warned that this cycle of undercharging and overservicing often led to burn out.
“By not understanding their true worth, lawyers are left working harder to make their targets – like that hamster on the wheel, running around until they fall off.
“Lawyers are not that commercially aware – they go to law school, not business school – so it’s a baptism by fire when they go into a firm and suddenly they have to do all this other stuff around fees and money.
“But with a greater sense of self-worth they can step back and consider the impact of what they are doing – for the client, the firm and themselves.”
Ms Ugatti shared one example of the impact the new formula can have.
“I worked with a wills and probate solicitor with 25 years’ experience. She was incredibly conscientious, very good at what she does, a perfectionist working very hard, but she said to me ‘I have never considered my value’.
“Now she only works with the clients she wants to work with, and she knows how to charge them appropriately. By boosting her self-worth, her fees increased by 50%.”
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