Undoubtedly, this issue of understanding the business aspect of law is a pain point for many lawyers.
I received some messages in my inbox which further confirmed it. Interestingly, I understand that the new NBA President shares my view on this issue. I am hoping the assertion is true cos it will be a good time to change the old narrative.
When I started my catering business in 2005, I knew little about the business of catering even though I had done several other businesses in the past.
All I knew was to cook and sell. And because I was good at marketing, making sales was not an issue. My home work was well done so I had an available market to sell to.
Problem arose when some of the benefits I leveraged on to start the business were no longer available.
I started my catering business from the comfort of my home and with a capital of N6,000 which means I had to depend on family for things like cooking gas, water supply, lighting, refrigerator etc. Thankfully, I was also allowed to use my Grandpa’s car and driver for market runs and delivery.
These benefits were part of my cost of production but because I got them for free, I never factored the cost into the end product, the food I was supplying. I calculated my profit based on the other costs only so I thought I was making good profit.
Problem arose when Grandma felt I had gotten enough support and the business was stabilised enough to run itself. It was then it became clear to me that I had been short changing myself and the profit I thought I was making wasn’t profit at all.
This is the same way you short change yourself when you don’t factor in costs like; transportation, documentation, photocopying, miscellaneous as reimbursable expenses in your invoice or fee note and then separate it entirely from your professional fee.
BILLING is a vital aspect that requires special attention and understanding if you are to profit from law practice.
The favourite example I always use is a simple brief on incorporation of Company.
Before the recent changes made by the Corporate Affairs Commission (CAC) the norm was to walk into the office to get the incorporation done. Let’s say the total official cost required is N40,000 and you bill your client N100,000 for it without considering other expenses like the back and forth to CAC office, the cost of photocopying, etc. Those other expenses should be included as part of your cost of delivering the service else you may just have to make do with what is left which may not even be commensurate to the effort and energy expended.
Do you now see how you’ve been short changing yourself?
Ready to correct your errors so as to start creating wealth from legal practice?
What should you do? Seek knowledge.
As usual, share your thoughts on this.
Read Part (I) here
Busola Ajala is a lawyer, entrepreneur and a motivational speaker.