Excerpted from SEAK’s course, “How to Start, Build, and Run a Successful Physician Life Care Planning Practice

Let’s talk about how to charge. Generally, there are two different ways physicians charge for these life care plans. They either charge by the hour, or they charge by a flat rate. So let’s take the flat rate first. Flat rates, so there may be a schedule of fees for life care plans. A simple life care plan may be, you know, $2,000. A catastrophic life care plan may be, you know, $10,000, or whatever the fee is, okay? And that’s what they charge. Everybody knows what the rate is, everybody understands that, and that’s how much you charge.

When you charge by the hour, the problem with charging by the hour is that the clients, especially new clients, are very reluctant to give you a blank check. So let’s say you’re charging $500 an hour for your time in doing a life care plan, and that includes all the services that you do, reviewing records, writing reports, costing out things, meeting with the injured person, so on and so forth. The lawyer that’s hired you says to themselves, “Well, okay, $500 an hour is reasonable, but how do I control how many hours you’re gonna put in? If I say okay and I sign a retention agreement saying $500 an hour, it’s like giving the physician who I’ve never worked with before a blank check.” So, sometimes clients like attorneys and insurance companies would much prefer to pay a flat fee. This gives them certainty in terms of how much they’re gonna have to pay and so forth.

So just think of it in your own personal terms. Many of you eventually will have to hire an attorney, whether it would be a real estate problem, whether it be an affidavit of divorce or something. And if you went into an attorney’s office, and he told you, “This project is gonna cost $5,000,” well, you can think about if that’s fair and reasonable. If it is, you sign an agreement and pay the $5,000. However, if they say that, “We’re gonna charge you $500 an hour,” and you ask them, “How many hours is it gonna take?” and they give you a lawyer-like answer, he would say, “Well, we don’t know. It depends on how much work is involved.” So now you’re faced with the choice of either paying $5,000 and that’s it, or paying $500 an hour with no certainty as to how much it’s gonna be. And every day you go home, and every day when you get your mail, you open up the mail and say, “Oh, God, I hope it’s not another bill from the attorney.” And you really have no parameters.

There is, sort of, another way of doing it. When we work with a physician as a consultant, very often we might do an hourly rate. Sometimes we’ll do a flat fee. Sometimes we’ll do an hourly rate. If we do an hourly rate, I will say, “The fee is $3,000. I will not exceed $3,000 without your written consent.” So they know that the maximum I’m gonna charge is $3,000 even though we’re working on an hourly rate, and that gives them some assurance that we’re not gonna run wild and run up some crazy bill.

Excerpted from SEAK’s stream on-demand course, How to Start, Build, and Run a Successful Life Care Planning Practice