Law Practice Management-- How To Determine Your Costs



Figuring out charges is a difficult law practice management job for a lot of attorneys when thinking through their law company marketing plans. In determining charges for specific services, attorneys frequently disappoint what they need to charge. When making their law firm marketing strategies, too lots of attorneys are afraid of even charging the competitive rate for their services. Even more, they make the pricing decisions typically with no data or conceptual framework. In addition, instead of focusing their efforts on how they can validate getting leading dollar for what they offer, they charge a charge that is typically way too low and typically actually can frighten prospective customers who think there is something missing from a service that is "cheap". Furthermore numerous attorneys do not understand that many purchasers in the market without a doubt are "value purchasers" and not trying to find "cheap".

Prior to you sit down and begin believing through your law practice management pricing method you require some differences around rates frequently utilized in law firm marketing preparation. Do know a law practice management law firm marketing strategy is not effective if you only bring in people who desire to pay the lowest charge for a service. Rather, you desire to focus your law practice management and law firm marketing strategies on drawing in clients who will end up being long term possessions to the company.

There are basically four ways of identifying just how much you must be charging for your services. Lets move right into those now.

The Marketplace Method In Law Practice Management Prices

Get your assistant to support you in this law practice management task and spend some time finding what the range of pricing is in the community. To keep it basic for them consist of a stamped, self-addressed envelope with a list of the most common services used in your practice location. My suggestion in law firm marketing preparation is to charge at the 75% level of the list.

Remember that in general it is not a good law practice management strategy to complete on price. Most potential customers will see prices that is too low as a signal that there is something missing either from the service, the service provider, or the company.

The Cost Technique in Law Practice Management Prices

This law practice management rates technique is really straightforward actually. One simply determines what the costs are to provide services or products and adds on a affordable revenue, someplace in between fifteen percent at the least and maybe thirty 3 percent at the most. The most common mistake in law practice management utilizing this approach is to neglect to include some form of your cost. Solo and little company lawyers tend to not include their own wage!

In law practice management often you count yourself out of the expenses and you need to include yourself in the expenditures. Frequently you are doing at least some of the management work. If you are all three of these in one, you need to think about one income as due you for your time and knowledge as the specialist and supervisor as well as a revenue of fifteen to thirty percent due you as the owner.

Fixed Rate Method in Law Practice Management Rates

This is the method used by lots of auto mechanics (it is called "the flat rate book") and other company. This method is where you figure out a fixed rate for numerous tasks and charge that rate no matter what. If the mechanic spends less time than set aside for the job, he makes more. He makes less if he spends more time than designated. However in the end, everything levels (well, normally to the mechanics' favor if you ask me). Another example using this approach is how managed healthcare has used this system with medical facilities and medical professionals . If they prefer, legal representatives can utilize this system.

The " Guideline of 3" in Law Practice Management Rates

This " guideline of thumb" called the "rule of three" utilized in law practice management is not what your CPA may tell you and it does not fail you either. For the very first third we will take the total quantity of salaries/bonuses (not benefits simply salaries-- advantages go into the second 3rd coming next) for the earnings generators and/or timekeepers (this includes you if you are producing earnings) and call that our first 3rd. What you need to do is take the total quantity (in this example $300,000) and now figure out how much you should charge per billable hour, per repaired rate or how numerous contingency fee cases won to be sure you hit the target we need to hit offered our first 3rd number times three (in this example $300,000).

This method shows you how much per hour you need to charge. If you are the owner of the practice you deserve a fair revenue as well don't you agree? If this technique is a bit too confusing do feel totally free to contact me and I will help you sort it out in a few minutes on the phone.

It is a good idea to think through all of these prices approaches in identifying your law practice management rates method before setting a rate and moving ahead with a law company marketing plan to ensure you are completely checking out all alternatives. In another article I will inform you click resources how to speak to prospective customers so you never have a problem getting the charge you should have.

Law Practice Management-- How To Identify Your Charges



Identifying charges is a difficult law practice management job for most attorneys when believing through their law practice marketing strategies. In figuring out charges for particular services, attorneys frequently disappoint what they should charge. Too lots of lawyers are scared of even charging the competitive price for their services when making their law practice marketing plans. Even more, they make the prices decisions typically with no data or conceptual structure. In addition, instead of focusing their efforts on how they can justify getting top dollar for what they use, they charge a charge that is often way too low and frequently actually can frighten possible customers who believe there is something missing from a service that is " low-cost". In addition lots of attorneys do not realize that the majority of buyers in the market by far are " worth buyers" and not trying to find " inexpensive".

Before you sit down and start thinking through your law practice management pricing strategy you require some differences around prices frequently used in law company marketing planning. Do know a law practice management law company marketing plan is not efficient if you only draw in people who desire to pay the lowest cost for a service. Instead, you desire to focus your law practice management and law firm marketing plans on attracting customers who will become long term assets to the firm.

There are essentially four methods of determining just how much you ought to be charging for your services. Lets move right into those now.

The Marketplace Approach In Law Practice Management Rates

This is one great method of figuring out rates. Get your assistant to support you in this law practice management job and invest a long time discovering what the series of prices remains in the community. Have her do a "mystery buyer" study by calling around as if he/she were a prospective customer and learn what your competitors say on the phone to her around pricing. She may require to call from her house phone to avoid caller ID. As another alternative you might have him/her call other assistants or paralegals at your rivals and use to exchange your charges for their costs or you might do that with other lawyers yourself in your market. If you truly wish to enter into it and have optimal data you can write possibly a couple of dozen competitors in your marketplace and state you are doing a fee study and if they would send you their cost list you will create a composite list that does not determine those responding and send them a copy of the outcomes. To keep it simple for them include a stamped, self-addressed envelope with a list of the most common services provided in your practice area. Now you will see what people are charging for services similar to those you provide. You must have the ability to come up with a variety of costs. Use this range to set prices for your own services. My recommendation in law company marketing planning is to charge at the 75% level of the list. So you ought to be at or in the top 25% of the fees.

Remember that in general it is not a great law practice management method to compete on cost. A lot of possible clients will see rates that is too low as a signal that there is something missing out on either from the service, the provider, or the firm. And people who are trying to find a low price will follow that low cost any place they can find it rather than ending up being long-lasting customers. So be sure that your cost covers your expenses and a sensible profit margin.

The Cost Approach in Law Practice Management Prices

This law practice management pricing technique is very simple really. The most typical error in law practice management using this approach is to disregard to include some kind of your expenditure.

OK, let me state it again. In law practice management often you count yourself out of the expenses and you ought to include yourself in the expenses. Why? Often you are doing at least a few of the technical work. Yes? Frequently you are doing at least a few of the management work. Yes? As the owner of the organisation you are due a affordable profit. Yes? If you are all three of these in one, you should consider one income as due you for your time and knowledge as the service technician and supervisor as well as a profit of fifteen to thirty percent due you as the owner. Be sure to include a affordable expense for your supervisory and technical work in the expenditures part of this formula.

Fixed Rate Approach in Law Practice Management Pricing

This is the technique used by many vehicle mechanics (it is called "the flat rate book") and other service companies. This technique is where you determine a set rate for various tasks and charge that rate no matter what. Another example utilizing this method is how handled health care has utilized this system with doctors and health centers .

The " Guideline of Three" in Law Practice Management Prices

This "rule of thumb" called the " guideline of three" used in law practice management is not what your Certified Public Accountant may inform you and it does not fail you either. Ask your CPA what they believe about it and they will like it. To begin we are going to be believing in thirds. For the very first third we will take the overall amount of salaries/bonuses (not benefits simply salaries-- advantages enter into the second 3rd following) for the profits generators and/or timekeepers (this includes you if you are creating income) and call that our very first third. So accumulate the salaries of the attorneys, paralegals, and legal secretaries who create revenue or are timekeepers and call this your first 3rd (lets simply say that number was $100,000 to keep it easy). Whatever that number is take that number again and it is your second third which we will call your "overhead" ( therefore that 2nd 3rd is $100,000 and do not forget you if you are doing some managing partner type duties since that part of your time goes here in overhead). Then take that very same number and we will call that your last 3rd, which we will call gross profits (another $100,000). What you need to do is take the total amount (in this example $300,000) and now determine just how much you should charge per billable hour, per repaired rate or how lots of contingency cost cases won to be sure you struck the target we need to strike offered our very first 3rd number times 3 (in this example $300,000).

This method reveals you just how much per hour you need to charge. Since you understand how numerous billable hours each income generator can do per month, merely divide that into your total of all thirds ($300,000) to see what you require to charge per billable hour to make your numbers come out properly. As long as you hit your targets you will be ensured of a 15% to 30% net make money from your operations. After all if you are the owner of the practice you should have a fair profit also don't you concur? This approach is known as the Guideline of Three. , if this technique is a bit too complicated do feel totally read the full info here free to call me and I will help you arrange it out in a couple of minutes on the phone.

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It is a excellent idea to think through all of these rates methods in determining your law practice management prices method before setting a cost and continuing with a law office marketing strategy to guarantee you are thoroughly exploring all choices. Keep in mind the propensity for most attorneys is to price too low. Don't do that! In another short article I will inform you how to speak with potential clients so you never have a issue getting the charge you should have.

Law Practice Management-- How To Identify Your Charges



Figuring out costs is a challenging law practice management job for most attorneys when thinking through their law office marketing strategies. In identifying charges for certain services, attorneys typically fall brief of what they must charge. When making their law company marketing strategies, too numerous attorneys are scared of even charging the competitive price for their services. Further, they make the pricing choices often with no data or conceptual framework. Furthermore, instead of focusing their efforts on how they can justify getting leading dollar for what they use, they charge a cost that is typically way too low and frequently really can frighten off potential clients who believe there is something missing out on from a service that is " inexpensive". Furthermore many lawyers do not understand that a lot of buyers in the marketplace without a doubt are "value purchasers" and not looking for " low-cost".

So before you take a seat and begin believing through your law practice management prices method you require some differences around pricing frequently utilized in law office marketing planning. Add your rates strategy to your law company marketing plans. You need to be sure that you are charging a sufficient fee on whatever to ensure you a good revenue not simply a excellent living. Do know a law practice management law practice marketing strategy is ineffective if you just draw in individuals who wish to pay the least expensive fee for a service. These are not faithful clients. Instead, you desire to focus your law practice management and law company marketing intend on drawing in customers who will end up being long term properties to the firm. Low cost customers are not constructing your base of long term clients I can promise you that.

There are basically four ways of identifying just how much you need to be charging for your services. Lets move right into those now.

The Market Method In Law Practice Management Prices

This is one great method of identifying pricing. Get your assistant to support you in this law practice management task and spend a long time finding what the range of pricing remains in the neighborhood. Have her do a " secret consumer" study by calling around as if he/she were a prospective client and learn what your competitors say on the phone to her around prices. She may require to call from her home phone to avoid caller ID. As another option you could have him/her call other assistants or paralegals at your competitors and provide to exchange your costs for their charges or you could do that with other attorneys yourself in your market. If you actually wish to get into it and have optimal data you can compose perhaps a couple of dozen rivals in your market and say you are doing a cost study and if they would send you their cost list you will produce a composite list that does not identify those reacting and send them a copy of the results. To keep it easy for them include a stamped, self-addressed envelope with a list of the most typical services used in your practice area. Now you will see what individuals are charging for services similar to those you offer. You need to be able to create a variety of rates. Use this variety to set prices for your own services. My suggestion in law office marketing preparation is to charge at the 75% level of the list. So you need to be at or in the leading 25% of the costs.

Keep in mind that in general it is not a excellent law practice management strategy to contend on cost. The majority of potential customers will see pricing that is too low as a signal that there is something missing either from the service, the provider, or the company. And people who are trying to find a low price will follow that low price anywhere they can find it instead of becoming long-lasting clients. So make sure that your price covers your expenses and a sensible earnings margin.

The Cost Method in Law Practice Management Prices

This law practice management prices method is very straightforward actually. The most typical mistake in law practice management utilizing this method is to overlook to consist of some type of your expenditure.

OK, let me state it once again. In law practice management often you count yourself out of the expenditures and you should include yourself in the expenses. Why? Typically you are doing at least a few of the technical work. Yes? Frequently you are doing a minimum of some of the management work. Yes? As the owner of business you are due a affordable earnings. Yes? If you are all 3 of these in one, you ought to think about one wage as due you for your time and competence as the specialist and supervisor along with a profit of fifteen to thirty percent due you as the owner. Be sure to consist of a reasonable cost for your technical and supervisory work in the expenses part of this formula.

Fixed Rate Approach in Law Practice Management Pricing

This is the method used by many car mechanics (it is called "the flat rate book") and other provider. This technique is where you identify a fixed rate for different jobs and charge that rate no matter what. If the mechanic spends less time than allocated for the job, he makes more. If he spends more time than allotted, he earns less. In the end, it all evens out (well, typically to the mechanics' favor if you ask me). Another example using this method is how managed healthcare has used this system with physicians and hospitals . Lawyers can utilize this system if they prefer.

The "Rule of 3" in Law Practice Management Prices

This " guideline of thumb" called the "rule of 3" used in law practice management is not what your CPA may tell you and it does not fail you either. Ask your CPA what they believe about it and they will like it. To start we are going to be thinking in thirds. For the very first 3rd we will take the total quantity of salaries/bonuses (not benefits just wages-- benefits go into the 2nd third following) for the revenue generators and/or timekeepers (this includes you if you are producing earnings) and call that our first 3rd. Include up the wages of the lawyers, paralegals, and legal secretaries who produce earnings or are timekeepers and call this your first third check my reference (lets just state that number was $100,000 to keep it simple). Whatever that number is take that number again and it is your 2nd third which we will call your "overhead" ( therefore that 2nd 3rd is $100,000 and do not forget you if you are doing some handling partner type duties since that part of your time goes here in overhead). Take that very same number and we will call that your last third, which we will call gross earnings (another $100,000). What you need to do is take the total amount (in this example $300,000) and now figure out how much you should charge per billable hour, per repaired rate or the number of contingency cost cases won to be sure you struck the target we need to hit given our first 3rd number times 3 (in this example $300,000).

This approach shows you how much per why not check here hour you need to charge. Since you know the number of billable hours each earnings generator can do per month, merely divide that into your overall of all thirds ($300,000) to see what you require to charge per billable hour to make your numbers come out correctly. As long as you hit your targets you will be guaranteed of a 15% to 30% net benefit from your operations. If you are the owner of the practice you deserve a reasonable revenue as well don't you concur? This method is referred to as the Guideline of 3. If this technique is a bit too complicated do feel free to contact me and I will help you arrange it out in a couple of minutes on the phone.

It is a great concept to believe through all of these rates approaches in identifying your law practice management pricing technique before setting a price and moving ahead with a law company marketing plan to ensure you are completely exploring all choices. In another article I will inform you how to speak to prospective clients so you never have a problem getting the cost you deserve.

Law Practice Management-- How To Identify Your Fees



Determining costs is a tough law practice management task for most lawyers when analyzing their law company marketing strategies. In figuring out fees for certain services, lawyers often fall short of what they need to charge. Too many attorneys are scared of even charging the competitive price for their services when making their law firm marketing plans. Even more, they make the pricing choices often with no information or conceptual framework. In addition, instead of focusing their efforts on how they can validate getting leading dollar for what they provide, they charge a cost that is often way too low and often really can frighten prospective customers who believe there is something missing from a service that is " inexpensive". Furthermore many lawyers do not realize that the majority of purchasers in the marketplace without a doubt are " worth purchasers" and not searching for " inexpensive".

Prior to you sit down and begin thinking through your law practice management pricing technique you require some differences around rates frequently utilized in law firm marketing planning. Do know a law practice management law firm marketing plan is not efficient if you only draw in individuals who desire to pay the least expensive cost for a service. Rather, you desire to focus your law practice management and law company marketing strategies on bring in customers who will end up being long term assets to the firm.

There are basically four ways of identifying how much you ought to be charging for your services. Lets move right into those now.

The Market Technique In Law Practice Management Prices

This is one excellent way of identifying prices. Get your assistant to support you in this law practice management task and spend a long time finding what the series of pricing remains in the neighborhood. Have her do a " secret buyer" study by calling around as if he/she were a prospective client and discover what your rivals say on the phone to her around pricing. She might need to call from her home phone to avoid caller ID. As another alternative you could have him/her call other assistants or paralegals at your competitors and provide to exchange your costs for their fees or you might do that with other attorneys yourself in your market. If you really desire to get into it and have maximum information you can write maybe a few lots competitors in your market and state you are doing a charge survey and if they would send you their fee list you will create a composite list that does not identify those reacting and send them a copy of the results. To keep it simple for them consist of a stamped, self-addressed envelope with a list of the most common services used in your practice area. Now you will see what individuals are charging for services similar to those you use. You should have the ability to create a series of costs. Utilize this variety to set costs for your own services. My suggestion in law practice marketing planning is to charge at the 75% level of the list. So you should be at or in the top 25% of the charges.

Keep in mind that in general it is not a excellent law practice management method to compete on cost. A lot of potential customers will see rates that is too low as a signal that there is something missing out on either from the service, the service provider, or the company. And people who are trying to find a low rate will follow that low rate any place they can discover it rather than becoming long-lasting clients. Be sure that your cost covers your expenses and a reasonable earnings More Bonuses margin.

The Expense Approach in Law Practice Management Pricing

This law practice management pricing technique is really straightforward actually. The most typical error in law practice management using this technique is to disregard to include some kind of your expenditure.

In law practice management typically you count yourself out of the expenses and you must include yourself in the costs. Frequently you are doing at least some of the management work. If you are all 3 of these in one, you need to consider one income as due you for your time and expertise as the technician and manager as well as a profit of fifteen to thirty percent due you as the owner.

Fixed Rate Method in Law Practice Management Pricing

This is the method used by many auto mechanics (it is called "the flat rate book") and other company. This technique is where you figure out a set rate for different jobs and charge that rate no matter what. He makes more if the mechanic invests less time than set aside for the job. If he spends more time than allocated, he earns less. But in the end, it all levels (well, normally to the mechanics' favor if you ask me). Another example using this method is how handled healthcare has utilized this system with hospitals and doctors . Attorneys can utilize this system if they desire.

The "Rule of 3" in Law Practice Management Prices

This "rule of thumb" called the "rule of three" utilized in law practice management is not what your Certified Public Accountant may inform you and it does not fail you either. For the first third we will take the total quantity of salaries/bonuses (not advantages just wages-- advantages go into the second 3rd coming next) for the earnings generators and/or timekeepers (this includes you if you are producing income) and call that our first third. What you need to do is take the total amount (in this example $300,000) and now figure out how much you must charge per billable hour, per fixed rate or how many contingency cost cases won to be sure you struck the target we need to strike provided our first 3rd number times 3 (in this example $300,000).

This technique shows you how much per hour you require to charge. If you are the owner of the practice you should have a fair revenue as well do not you concur? If this method is a bit too confusing do feel complimentary to call me and I will help you sort it out in a couple of minutes on the phone.

It is a great idea to think through all of these rates techniques in identifying your law practice management pricing method before setting a rate and continuing with a law firm marketing strategy to ensure you are thoroughly checking out all options. Keep in mind the propensity for the majority of legal representatives is to price too low. Don't do that! In another post I will tell you how to talk to prospective customers so you never ever have a problem getting the fee you should have.

Law Practice Management-- How To Identify Your Fees



Determining charges is a hard law practice management task for many lawyers when believing through their law office marketing plans. In determining costs for certain services, lawyers typically disappoint what they must charge. Too lots of lawyers are scared of even charging the competitive cost for their services when making their law practice marketing plans. Further, they make the rates decisions typically without any information or conceptual framework. In addition, instead of focusing their efforts on how they can validate getting leading dollar for what they offer, they charge a charge that is typically way too low and often in fact can frighten potential clients who think there is something missing from a service that is " low-cost". Additionally numerous lawyers don't recognize that the majority of purchasers in the marketplace without a doubt are " worth buyers" and not searching for " inexpensive".

Prior to you sit down and start thinking through your law practice management pricing strategy you require some differences around rates typically used in law firm marketing preparation. Include your prices strategy to your law company marketing plans. You require to be sure that you are charging a adequate fee on whatever to guarantee you a good earnings not just a good living. If you just attract individuals who want to pay the least expensive charge for a service, do understand a law practice management law firm marketing strategy is not efficient. These are not devoted clients. Rather, you want to focus your law practice management and law office marketing intend on drawing in customers who will become long term possessions to the company. Low price customers are not building your base of long term clients I can assure you that.

There are generally four methods of identifying just how much you should be charging for your services. Lets move right into those now.

The Marketplace Technique In Law Practice Management Rates

This is one good method of figuring out prices. Get your assistant to support you in this law practice management task and spend some time finding what the range of pricing remains in the community. Have her do a " secret buyer" study by calling around as if he/she were a potential customer and learn what your competitors state on the phone to her around prices. She may require to call from her home phone to avoid caller ID. As another option you might have him/her call other assistants or paralegals at your competitors and offer to exchange your fees for their costs or you could do that with other attorneys yourself in your market. If you really desire to enter it and have optimal data you can compose possibly a couple of dozen competitors in your marketplace and state you are doing a cost study and if they would send you their fee list you will develop a composite list that does not determine those responding and send them a copy of the results. To keep it simple for them include a stamped, self-addressed envelope with a list of the most typical services used in your practice area. Now you will see what people are charging for services comparable to those you provide. You need to be able to create a series of prices. Use this range to set rates for your own services. My suggestion in law practice marketing preparation is to charge at the 75% level of the list. You ought to be at or in the top 25% of the charges.

Bear in mind that in basic it is not a excellent law practice management method to complete on rate. Many potential clients will see prices that is too low as a signal that there is something missing out on either from the service, the service provider, or the company. And people who are trying to find a low cost will follow that low rate anywhere they get redirected here can discover it rather than ending up being long-term customers. Be sure that your rate covers your costs and a sensible earnings margin.

The Expense Method in Law Practice Management Prices

This law practice management pricing method is extremely straightforward really. One just identifies what the expenses are to deliver services or items and includes on a reasonable revenue, someplace between fifteen percent at the least and possibly thirty 3 percent at the most. The most common mistake in law practice management using this technique is to disregard to include some kind of your expense. Solo and small company lawyers tend to not include their own wage!

OK, let me say it again. In law practice management frequently you count yourself out of the expenditures and you should include yourself in the costs. Why? Frequently you are doing a minimum of some of the technical work. Yes? Often you are doing at least some of the management work. Yes? As the owner of the organisation you are due a reasonable revenue. Yes? If you are all 3 of these in one, you need to think about one salary as due you for your time and know-how as the technician and supervisor along with a revenue of fifteen to thirty percent due you as the owner. So make certain to consist of a reasonable expense for your managerial and technical work in the costs part of this formula.

Fixed Rate Technique in Law Practice Management Pricing

This is the method used by numerous vehicle mechanics (it is called "the flat rate book") and other provider. This approach is where you determine a set rate for numerous jobs and charge that rate no matter what. If the mechanic spends less time than set aside for the job, he makes more. He makes less if he invests more time than allocated. But in the end, it all evens out (well, typically to the mechanics' favor if you ask me). Another example using this technique is how managed healthcare has actually utilized this system with health centers and medical professionals . If they prefer, legal representatives can utilize this system.

The "Rule of 3" in Law Practice Management Rates

This "rule of thumb" called the " guideline of three" used in law practice management is not what your CPA might tell you and it does not fail you either. Ask your CPA what they consider it and they will like it. To start we are going to be thinking in thirds. For the very first 3rd we will take the total quantity of salaries/bonuses (not benefits simply incomes-- benefits go into the 2nd third coming next) for the earnings generators and/or timekeepers (this includes you if you are creating income) and call that our very first 3rd. So build up the wages of the legal representatives, paralegals, and legal secretaries who generate profits or are timekeepers and call this your first 3rd (lets just say that number was $100,000 to keep it basic). Whatever that number is take that number again and it is your second 3rd which we will call your "overhead" ( therefore that 2nd 3rd is $100,000 and do not forget you if you are doing some managing partner type responsibilities since that part of your time goes here in overhead). Take that very same number and we will call that your last third, which we will call gross earnings (another $100,000). What you need to do is take the total amount (in this example $300,000) and now determine just how much you should charge per billable hour, per fixed rate or how lots of contingency fee cases won to be sure you hit the target we must hit provided our very first 3rd number times 3 (in this example $300,000).

This technique reveals you how much per hour you require to charge. If you are the owner of the practice you are worthy of a fair earnings as well don't you concur? If this technique is a bit too complicated do feel totally free to call me and I will help you sort it out in a couple of minutes on the phone.

It is a good concept to believe through all of these rates techniques in identifying your law practice management prices strategy prior to setting a cost and moving ahead with a law company marketing strategy to guarantee you are thoroughly exploring all choices. In visit their website another short article I will tell you how to speak to potential clients so you never have a issue getting the charge you should have.

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