Micha Smith is a young attorney who has decided to leave her current employer and set up her own law practice. She has prepared the following monthly cost estimates:
Salary of legal secretary $3,000
Office rent and utilities 1,200
Other costs 1,500
Total cost $5,700
Micha would like to earn $3,300 month and feels that she will be able to bill 150 hours of her time per month to clients.
Required:
a) Assuming that Micha is correct is her estimates, what fee per hours should Micha charge her clients?
b) At the calculated in (a), what would Micha earn in a month in which her time charged to clients was only 100 hours? Assume that all costs are fixed.