How to master tax service pricing with tax attorney Eric Green
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Key takeaways
- Straight from the expert: Eric Green, a leading tax attorney and Founder of Tax Rep Network, shares insights on building a profitable tax practice, focusing on tax representation and effective pricing strategies.
- A better busy season: Ignition helps to alleviate the stress of busy season, by automating and optimizing billing, proposals, and payment collection, leading to faster payments and reduced administrative work.
- Consultation fees and client management: Eric Green emphasizes the importance of consultation fees in managing client expectations and filtering serious clients, with Ignition helping to streamline this process.
- Pricing flexibility and consistency: Having consistent pricing across your firm is important, as is maintaining the flexibility to adjust for complex cases. With Ignition, you can adjust your pricing with ease.
- Efficient retainer management: Ignition helps in efficiently managing retainers and ensuring timely payments, crucial for the financial health of tax resolution work.
- Leveraging technology for profitability: Eric Green shares how leveraging technology like Ignition has made his firm more efficient and profitable, especially in handling complex tax cases.
- Setting fair and competitive prices: Get insights into setting competitive yet fair prices in tax representation and the importance of viewing yourself as a specialist.
- Building a professional reputation: Get tips on maintaining a professional image and enhancing reputation in the digital age, including leveraging technology for a consistent, professional appearance.
- Ignition's role in practice transformation: Find out how Ignition can transform your tax practices by watching an on-the-spot demo.
Eric Green’s blueprint for build a successful tax firm
Founder of Tax Rep Network, Eric Green is a tax attorney who has mastered the art of teaching accounting and tax professionals the secrets of building a profitable tax practice.
Specializing in tax representation – a niche liaison service between clients and the IRS – he has become a vanguard in resolving tax disputes.
He has recently written a book, How to Build a Million Dollar Tax Representation Practice: A Step-by-Step Approach.
In it, he dedicates an entire chapter to pricing your services. We sat down with Eric Green to take a deeper dive into this topic to explore how Ignition's tools and features can support and enhance his proven methods.
The goal? To help you to secure your firm's financial future and elevate your practice in our digital age.
Modern payment solutions and consultation fees
In his book, Eric Green mentions the importance of consultation fees in managing client expectations and weeding out ‘tire kickers’.
As he became more well-known for his expertise, he was getting phone calls all the time.
One frustration he faced was that he would send these potential clients an agreement for a consultation: “If they signed it and sent it back with the payment, great! But honestly, by the next day, it was out of sight, out of mind for me,” he says.
“So, at the end of the year, I had a folder I had to go through of all the people who didn’t come back to me because I never thought to follow up.”
“What I like about Ignition is that the technology allows us to send out the agreement, and we can move on to other things,” he says. “But Ignition doesn't forget. It follows up. It will alert me when they've read it, they've signed it, the payment comes in.”
In the chaos of practice, his team would sometimes start working on something before they were even hired.
“Now, we can go in [to Ignition] and see that they’ve read it and signed it, but if we haven't got the payment yet, it's pencils down until we get paid,” he says.
Consistency with flexibility
Eric Green understands that when it comes to pricing, it’s important his entire team is on the same page.
Again, Ignition can help with this. “By having standard pricing in Ignition, everyone knows what we charge," he says.
Before, he shares, each partner would be doing different deals.
“What you don't want is the referral source to hear from someone, ‘They charged me $5,000’, when that source was charged $7,500,” Eric Green says.
“What’s good about Ignition is, if I talk to a client and realize the work is going to be far more complicated … I can just go into the platform and edit it. It's very simple,” he says.
“That way, we’re consistent across the board, but in those situations where we do need to depart from the normal pricing structure, it's simple to do.”
Related content: Top tax season mistakes in 2024: The Tax Rep Network checklist
Managing retainers and ensuring timely payments from clients
As he said earlier, since implementing Ignition, his team is now ‘pencils down’ until they receive upfront payment for their tax resolution work.
Retainers play a vital role in securing these upfront payments.
Before using Ignition, he said, nobody was keeping an eye on anything. “I'm too busy. My staff were all trying to bill hours, and we would either start working on things before we were hired or assume the additional money had come in, because we didn't get alerted when the payment was made.”
So, Eric Green and his team would end up writing off time that they didn't get paid for, or they would have a lot of time spent on a case that they were still trying to get paid for.
“The automation aspect of it and being informed when everything happens just takes that away,” he says. “So now the team member knows payment was made or, if not, it's easy to go check.”
Given his case load, such ease has become paramount.
Whereas some of his law partners who do tax litigation have 20 or 30 cases, Eric Green currently has more than 240. “If you think I know what's going on with every one of those cases, no way,” he says.
“So, we found the practice got out of control, and the receivables climbed, which means you're writing stuff off. As much as I say in my book that we're on top of it, let's be real. There are times when the client’s going to send the payment and we're up against the deadline, so we'll do it. We write off some, but not nearly as much as we used to. It's now more the rarity than the rule that we’re writing off time.”
Leveraging technology for profitability
Eric Green contends that leveraging technology has made his firm so much more efficient that the jobs are more profitable.
He gives an example with offers in compromise, which allow someone to settle their tax debt for less than the full amount they owe:
“We used to have to draft the agreement and pull together the checklist. We would have one meeting with the person before we were even hired to walk them through what we needed, and off they’d go. Maybe they hire us; maybe they don't.
So, we may have just wasted our hour and a half to two hours right there.
But now, the technology has automated the agreements. We can get that same piece done in about 15 minutes.
We figured out, we open 10 to 20 new files a week, and we’ve actually cut – I think – 33 or 36 minutes off every file. So, if you think about it, we get between five and 10 hours of our staff time back, just not having to do all the upfront onboarding documents and everything else.
In a way, we can get things done without having to increase our prices, because our margins are just so much higher.”
Technology’s other plus – from the client perspective?
The professionalism, says Eric Green.
“When they leave [our office] and by the time they get home, the letter is waiting, the power of attorney's waiting, the link to pay, and the link to upload documents with our checklist … it's all there, because into Ignition it goes.’ The platform puts more of a professional face on the work,” he says.
Setting competitive yet fair prices for your tax services
In the world of tax representation, pricing can be intricate due to the variability of cases. Still, Eric Green has some suggestions for fellow tax professionals regarding setting competitive yet fair prices for their tax services.
“The difference with representation versus tax return preparation is that your real competition in the representation world are the national companies, which are gouging people, and lawyers, who bill at higher rates.
“So, my word of advice is you need to begin thinking of yourself as a specialist providing a specialized service.”
He likens it to healthcare and going from, say, a general family physician to a radiologist or oncologist – a specialist.
“You're going to bill more because you have very specific skills,” he says. “Most tax practitioners don't do this [tax representation], so when you've learned to do this, you can bill at a higher rate. If not in line with the lawyers, certainly closer.”
It’s about changing your mindset to recognize you’re not like everybody else.
“At some point, we began to realize: we're the Ferrari; we're not the Toyota Camry,” he says.
“If people just need an LLC [Limited Liability Company] or something, there are lots of lawyers that do that.”
“If they come to us, it's because there's something highly complicated – a tax issue, a partnership dispute – and they're calling in the commandos. They're calling in the specialists, and we charge accordingly.”
Enhancing your professional reputation
Eric Green’s content also emphasizes the importance of reputation in attracting clients.
He has some simple advice on how to maintain a professional image and build your reputation as a trusted tax professional in the digital age:
- Keep it professional; watch what you say and do on social media. “There are lots of things I'd like to say; I just don't say them. That's not the right forum for it.”
- Leverage software to put out a consistent and professional-looking image, as he mentions above. “With Ignition, what clients are getting from us looks professional… the message we're putting out is: ‘You're in the right place; we've got this locked down. We know what we're doing’.”
- Put out good content. This demonstrates thought leadership. People start to realize that when they deal with you, everything seems to be in order. You appear to know what you're talking about. It’s the difference between clients and potential clients feeling comfortable and wondering whether you really know what’s going on.
Where to go from here
Consider how integrating tools like Ignition could impact the day-to-day operations in your tax firm, from simplifying payments to optimizing pricing. If you're curious about the possibilities, watch an on-the-spot demo now. It's a practical step towards understanding how Ignition could fit into your practice, especially as you prepare for the next tax season.
