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.....$3000
Office rent and utilities........$1,200
Other costs ..........$1,500
Total cost ..........$5700
Micha would like to earn $3,300 a 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 in her estimates, what fee/hr should Micha charge her clients?
b. At the fee 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.