Law Practice Management-- How To Determine Your Costs



Determining charges is a challenging law practice management task for a lot of lawyers when thinking through their law firm marketing plans. In determining fees for specific services, lawyers frequently fall short of what they should charge. Too lots of attorneys are scared of even charging the competitive rate for their services when making their law firm marketing strategies.

Prior to you sit down and begin thinking through your law practice management rates method you require some distinctions around pricing frequently utilized in law company marketing planning. Then include your prices method to your law office marketing plans. You need to be sure that you are charging a sufficient charge on everything to guarantee you a great revenue not just a excellent living. If you just attract individuals who want to pay the least expensive charge for a service, do know a law practice management law company marketing plan is not reliable. These are not loyal customers. Instead, you wish to focus your law practice management and law firm marketing intend on attracting customers who will become long term possessions to the firm. Low rate clients are not building your base of long term clients I can promise you that.

There are essentially 4 ways of identifying just how much you must be charging for your services. Lets move right into those now.

The Market Technique In Law Practice Management Rates

This is one great way of identifying rates. Get your assistant to support you in this law practice management job and invest some time discovering what the series of pricing remains in the community. Have her do a "mystery consumer" research study by calling around as if he/she were a prospective customer and discover what your rivals state on the phone to her around rates. She might need to call from her home phone to prevent caller ID. As another alternative you could have him/her call other assistants or paralegals at your rivals and offer to exchange your costs for their fees or you might do that with other legal representatives yourself in your market. If you truly want to get into it and have optimal information you can write perhaps a few dozen competitors in your market and state you are doing a fee study and if they would send you their charge list you will produce a composite list that does not determine those reacting and send them a copy of the results. To keep it basic for them consist of a stamped, self-addressed envelope with a list of the most typical services used in your practice location. Now you will see what people are charging for services similar to those you use. You should have the ability to create a variety of rates. Use this variety to set prices for your own services. My suggestion in law practice marketing planning is to charge at the 75% level of the list. So you must be at or in the leading 25% of the fees.

Remember that in general it is not a great law practice management technique to contend on cost. The majority of potential clients will see pricing that is too low as a signal that there is something missing either from the service, the service provider, or the firm.

The Cost Technique in Law Practice Management Prices

This law practice management rates approach is really straightforward truly. One just identifies what the costs are to deliver service or products and includes on a affordable earnings, someplace between fifteen percent at the least and perhaps thirty three percent at the most. The most common mistake in law practice management using this method is to overlook to include some kind of your expenditure. Solo and small company attorneys tend to not include their own wage!

OK, let me state it once again. In law practice management frequently you count yourself out of the expenses and you should include yourself in the expenses. Why? Often you are doing a minimum of a few of the technical work. Yes? Frequently you are doing at least some of the management work. Yes? As the owner of business you are due a reasonable earnings. Yes? If you are all three of these in one, you should think about one income as due you for your time and expertise as the technician and manager along with a revenue click for source of fifteen to thirty percent due you as the owner. So make sure to consist of a sensible expense for your technical and managerial operate in the expenses part of this formula.

Fixed Rate Approach in Law Practice Management Rates

This is the technique used by lots of car mechanics (it is called "the flat rate book") and other service providers. This approach is where you figure out a fixed rate for numerous tasks and charge that rate no matter what. Another example using this approach is how managed health care has actually used this system with medical facilities and doctors .

The " Guideline of Three" in Law Practice Management Rates

This " general rule" called the "rule of three" utilized in law practice management is not what your CPA may inform 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 first 3rd we will take the overall amount of salaries/bonuses (not advantages just wages-- advantages go into the 2nd 3rd coming next) for the earnings generators and/or timekeepers (this includes you if you are producing revenue) and call that our first 3rd. 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 3rd which we will call your "overhead" ( therefore that 2nd third is $100,000 and don't forget you if you are doing some handling partner type duties additional info since that part of your time goes here in overhead). Take that same number and we will call that your last third, 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 how much you should charge per billable hour, per fixed rate or how many contingency charge cases won to be sure you struck the target we must strike offered our very first 3rd number times 3 (in this example $300,000).

This method shows you how much per hour you require to charge. If you are the owner of the practice you should have a fair profit as well don't you concur? If this technique is a bit too complicated do feel complimentary to contact me and I will assist you sort it out in a few minutes on the phone.

It is a excellent idea to believe through all of these prices techniques in determining your law practice management pricing method before setting a cost and moving ahead with a law company marketing plan to guarantee you are thoroughly checking out all alternatives. In another article I will inform you how to speak to prospective clients so you never ever have a issue getting the cost you should have.

Law Practice Management-- How To Identify Your Charges



Determining costs is a difficult law practice management job for most attorneys when thinking through their law company marketing strategies. In determining charges for specific services, attorneys frequently fall short of what they ought to charge. Too many lawyers are afraid of even charging the competitive rate for their services when making their law company marketing strategies.

Prior to you sit down and begin thinking through your law practice management pricing method you need some differences around pricing commonly used in law company marketing planning. Add your pricing strategy to your law firm marketing plans. You need to be sure that you are charging a enough charge on everything to ensure you a excellent earnings not simply a good living. If you just attract individuals who want to pay the least expensive fee for a service, do understand a law practice management law firm marketing strategy is not reliable. These are not devoted clients. Rather, you desire to focus your law practice management and law company marketing strategies on drawing in clients who will become long term possessions to the company. Low cost customers are not developing your base of long term clients I can promise you that.

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

The Market Technique In Law Practice Management Pricing

This is one excellent way of figuring out pricing. Get your assistant to support you in this law practice management job and spend some time finding what the range of pricing is in the community. Have her do a " secret shopper" research study by calling around as if he/she were a potential customer and discover out what your rivals say on the phone to her around pricing. She may require to call from her home phone to prevent caller ID. As another choice you could have him/her call other assistants or paralegals at your competitors and use to exchange your charges for their fees or you might do that with other legal representatives yourself in your market. If you actually want to get into it and have optimal data you can write possibly a few lots rivals in your marketplace and state you are doing a charge study and if they would send you their cost list you will produce a composite list that does not recognize those reacting and send them a copy of the results. To keep it basic for them consist of a stamped, self-addressed envelope with a list of the most typical services provided in your practice location. Now you will see what people are charging for services similar to those you provide. You must be able to develop a variety of costs. Use this range to set rates for your own services. My recommendation in law practice marketing preparation is to charge at the 75% level of the list. So you need to be at or in the top 25% of the fees.

Keep in mind that in general it is not a great law practice management method to compete on price. Many potential clients will see pricing that is too low as a signal that there is something missing either from the service, the supplier, or the company.

The Expense Technique in Law Practice Management Rates

This law practice management prices technique is extremely simple really. One simply identifies what the costs are to provide services or items and adds on a reasonable revenue, somewhere in between fifteen percent at the least and maybe thirty three percent at the most. The most common error in law practice management utilizing this method is to neglect to include some type of your expenditure. Solo and little company attorneys tend to not include their own wage!

OK, let me say it once again. In law practice management typically you count yourself out of the expenses and you ought to include yourself in the costs. Why? Frequently you are doing a minimum of a few of the technical work. Yes? Often you are doing a minimum of a few of the management work. Yes? As the owner of the organisation you are due a affordable earnings. Yes? If you are all three of these in one, you need to think about one salary as due you for your time and proficiency as the professional and supervisor along with a profit of fifteen to thirty percent due you as the owner. So be sure to consist of a reasonable expense for your supervisory and technical work in the expenses part of this formula.

Fixed Rate Approach in Law Practice Management Rates

This is the technique used by many automobile mechanics (it is called "the flat rate book") and other company. This approach is where you determine a fixed rate for numerous tasks and charge that rate no matter what. If the mechanic spends less time than allotted for the job, he makes more. He makes less if he invests more time than allocated. In the end, it all evens out (well, usually to the mechanics' favor if you ask me). Another example using this technique is how managed healthcare has utilized this system with doctors and hospitals . Lawyers can use this system if they desire.

The "Rule of Three" in Law Practice Management Rates

This " guideline" called the " guideline of three" used in law practice management is not what your Certified Public Accountant may tell you and it does not fail you either. Ask your Certified Public Accountant what they consider it and they will like it. To start we are going to be believing in thirds. For the very first 3rd we will take the overall amount of salaries/bonuses (not benefits just incomes-- benefits go into the 2nd 3rd following) for the profits generators and/or timekeepers (this includes you if you are creating revenue) and call that our first third. Include up the wages of the attorneys, paralegals, and legal secretaries who her comment is here create profits or are timekeepers and call this your very first third (lets simply say that number was $100,000 to keep it basic). Whatever that number is take that number once again and it is your second third which we will call your "overhead" ( hence that 2nd third is $100,000 and do not forget you if you are doing some handling partner type duties because that part of your time goes here in overhead). Take that exact same number and we will call that your last third, which we will call gross earnings (another $100,000). What you require to do is take the total quantity (in this example $300,000) and now figure out just how much you should charge per billable hour, per repaired rate or the number of contingency cost cases won to be sure you hit the target we need to hit given our very first 3rd number times 3 (in this example $300,000).

This approach reveals you how much per hour you need to charge. Since you understand how many billable hours each profits generator can do each month, just 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 correctly. As long as you strike your targets you will be guaranteed of a 15% to 30% net earnings from your operations. After all if you are the owner of the practice you should have a reasonable profit as well don't you concur? This approach is known as the Guideline of Three. If this method is a bit too complicated do do not hesitate to call me and I will assist you arrange it out in a few minutes on the phone.

It is a good idea to think through all of these pricing methods in identifying your law practice management pricing strategy before setting a rate and moving ahead with a law company marketing strategy to guarantee you are completely checking out all alternatives. In another post I will inform you how to speak to potential clients so you never ever have a problem getting the fee you deserve.

Law Practice Management-- How To Identify Your Fees



Determining fees is a hard law practice management job for the majority of attorneys when believing through their law company marketing plans. In determining charges for certain services, attorneys often fall brief of what they should charge. Too numerous lawyers are scared of even charging the competitive price for their services when making their law company marketing strategies.

So prior to you take a seat and start analyzing your law practice management pricing method you need some distinctions around rates commonly used in law office marketing preparation. Then include your prices method to your law practice marketing plans. You need to be sure that you are charging a sufficient cost on whatever to guarantee you a excellent profit not simply a excellent living. Do understand a law practice management law practice marketing plan is not effective if you just attract people who wish to pay the least expensive charge for a service. These are not loyal customers. Rather, you desire to focus your law practice management and law office marketing intend on drawing in clients who will end up being long term properties to the company. Low price clients are not building your base of long term customers I can guarantee you that.

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

The Marketplace Approach In Law Practice Management Pricing

This is one great way of determining pricing. Get your assistant to support you in this law practice management task and spend some time discovering what the range of rates is in the community. Have her do a " secret consumer" study by calling around as if he/she were a potential client and discover what your competitors state on the phone to her around rates. She might need to call from her home phone to prevent caller ID. As another choice you might have him/her call other assistants or paralegals at your competitors and use to exchange your costs for their fees or you could do that with other attorneys yourself in your market. If you really wish to enter into it and have maximum information you can compose possibly a few dozen competitors in your market and say you are doing a charge study and if they would send you their cost list you will create a composite list that does not recognize those responding and send them a copy of the results. To keep it easy for them consist of a stamped, self-addressed envelope with a list of the most typical services offered in your practice location. Now you will see what individuals are charging for services similar to those you use. You need to have the ability to develop a series of prices. Utilize this variety to set prices for your own services. My suggestion in law firm 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 fees.

Bear in mind that in general it is not a great law practice management method to compete on cost. A lot of potential clients will see prices that is too low as a signal that there is something missing out on either from the service, the wikipedia reference service provider, or the company. And individuals who are searching for a low rate will follow that low rate any place they can discover it instead of becoming long-lasting clients. Be sure that your rate covers your costs and a sensible profit margin.

The Cost Approach in Law Practice Management Prices

This law practice management prices technique is extremely uncomplicated actually. One simply identifies what the costs are to provide services or items and includes on a affordable revenue, someplace between fifteen percent at the least and possibly thirty three percent at the most. The most typical mistake in law practice management utilizing this approach is to neglect to consist of some form of your expense. Solo and little company lawyers tend to not include their own salary!

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 expenses. Why? Frequently you are doing at least some of the technical work. Yes? Typically you are doing at least some of the management work. Yes? As the owner of the company you are due a reasonable earnings. Yes? If you are all three read this article of these in one, you must think about one income as due you for your time and expertise as the service technician and supervisor along with a earnings of fifteen to thirty percent due you as the owner. So be sure to consist of a reasonable expense for your technical and supervisory work in the expenses part of this formula.

Fixed Rate Technique in Law Practice Management Rates

This is the technique utilized by many automobile mechanics (it is called "the flat rate book") and other company. This technique is where you identify a set rate for various tasks and charge that rate no matter what. He makes more if the mechanic spends less time than set aside for the task. If he spends more time than allotted, he makes less. But in the end, everything evens out (well, normally to the mechanics' favor if you ask me). Another example utilizing this technique is how handled healthcare has used this system with medical professionals and hospitals . If they prefer, attorneys can utilize this system.

The " Guideline of 3" in Law Practice Management Prices

This " guideline of thumb" called the "rule of 3" utilized in law practice management is not what your Certified Public Accountant might inform you and it does not fail you either. For the first 3rd we will take the total amount of salaries/bonuses (not benefits simply wages-- advantages go into the second 3rd coming next) for the earnings generators and/or timekeepers (this includes you if you are generating income) and call that our first third. What you need to do is take the overall quantity (in this example $300,000) and now figure out how much you should charge per billable hour, per fixed rate or how many contingency charge cases won to be sure you struck the target we should hit given our very first 3rd number times 3 (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 are worthy of a fair earnings as well do not you concur? If this approach is a bit too confusing do feel free to contact me and I will assist you sort it out in a couple of minutes on the phone.

It is a great idea to believe through all of these prices methods in identifying your law practice management prices method before setting a rate and moving ahead with a law company marketing plan to guarantee you are thoroughly exploring all options. In another short article I will tell you how to speak to potential customers so you never ever have a issue getting the charge you should have.

Law Practice Management-- How To Determine Your Fees



Identifying charges is a tough law practice management job for most attorneys when thinking through their law company marketing strategies. In identifying charges for particular services, attorneys often fall brief of what they ought to charge. Too lots of attorneys are scared of even charging the competitive cost for their services when making their law company marketing strategies.

Before you sit down and start thinking through your law practice management rates technique you need some distinctions around pricing commonly used in law firm marketing planning. Then include your prices method to your law practice marketing plans. You require to be sure that you are charging a adequate charge on everything to guarantee you a good earnings not simply a great living. Do understand a law practice management law office marketing plan is not effective if you just draw in individuals who wish to pay the most affordable fee for a service. These are not devoted customers. Instead, you wish to focus your law practice management and law office marketing intend on attracting customers who will end up being long term properties to the company. Low cost clients are not building your base of long term customers I can assure you that.

There are basically 4 methods of figuring out how much you need to be charging for your services. Lets move right into those now.

The Market Approach In Law Practice Management Prices

This is one great way of figuring out pricing. Get your assistant to support you in this law practice management task and invest a long time discovering what the variety 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 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 lawyers yourself in your market. If you really wish to enter into it and have maximum information you can write maybe a couple of dozen rivals in your marketplace and state you are doing a charge survey and if they would send you their cost list you will produce a composite list that does not identify those responding and send them a copy of the outcomes. To keep it easy for them include a stamped, self-addressed envelope with a list of the most typical services offered in your practice location. Now you will see what people are charging for services comparable to those you provide. You should have the ability to develop a variety of prices. Utilize this range to set costs for your own services. My recommendation in law company marketing preparation is to charge at the 75% level of the list. So you must be at or in the top 25% of the charges.

Keep in mind that in basic it is not a great law practice management technique to complete on rate. The majority of possible customers 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 company.

The Expense Technique in Law Practice Management Prices

This law practice management rates technique is extremely simple really. One simply identifies what the expenses are to provide items or services and includes on a sensible revenue, somewhere 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 overlook to include some form of your expenditure. Solo and little firm attorneys tend to not include their own wage!

OK, let me state it again. In law practice management often you count yourself out of the expenditures and you must include yourself in the expenses. Why? Typically 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 company you are due a affordable revenue. Yes? If you are all 3 of these in one, you must think about one income as due you for your time and competence as the service technician and manager in addition to a profit of fifteen to thirty percent due you as the owner. Be sure to include a sensible expense for your managerial and technical work in the expenditures part of this formula.

Fixed Rate Method in Law Practice Management Prices

This is the technique used by many vehicle mechanics (it is called "the flat rate book") and other service suppliers. This technique is where you determine a set rate for different jobs and charge that rate no matter what. Another example utilizing this technique is how managed health care has actually used this system with physicians and medical facilities .

The "Rule of 3" in Law Practice Management Pricing

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

This method reveals you how much per hour you need to charge. If you are the owner of the practice you deserve a reasonable profit as well don't you concur? If this method is a bit too complicated do feel free to call me this contact form and I will assist you sort it out in a couple of minutes on the phone.

It is a excellent idea to believe through all of these rates methods in identifying your law practice management rates technique before setting a price and moving ahead with a law firm marketing strategy to guarantee you are completely exploring all choices. In another article I will inform you how to speak to potential customers so you never ever have a problem getting the fee you are worthy of.

Law Practice Management-- How To Identify Your Charges



Identifying charges is a difficult law practice management job for a lot of attorneys when analyzing their law company marketing plans. In figuring out charges for certain services, attorneys often disappoint what they need to charge. Too many attorneys are scared of even charging the competitive price for their services when making their law office marketing plans. Further, they make the prices decisions typically with no data or conceptual structure. Additionally, instead of focusing their efforts on how they can justify getting top dollar for what they provide, they charge a charge that is frequently way too low and typically really can frighten possible customers who think there is something missing from a service that is " inexpensive". In addition lots of attorneys don't recognize that a lot of buyers in the marketplace without a doubt are "value purchasers" and not looking for "cheap".

Prior to you sit down and start thinking through your law practice management pricing strategy you require some differences around rates frequently utilized in law firm marketing preparation. Include your rates technique to your law firm marketing strategies. You require to be sure that you are charging a enough fee on whatever to guarantee you a excellent revenue not just a excellent living. If you only bring in people who desire to pay the lowest charge for a service, do understand a law practice management law company marketing plan is not efficient. These are not loyal clients. Rather, you want to focus your law practice management and law office marketing strategies on drawing in clients who will end up being long term assets to the company. Low cost customers are not developing your base of long term customers I can guarantee you that.

There are essentially 4 ways of identifying how much you need to be charging for your services. Lets move right into those now.

The Marketplace Approach In Law Practice Management Rates

This is one good method of figuring out rates. Get your assistant to support you in this law practice management task and invest some time finding what the variety of prices is in the community. Have her do a "mystery buyer" study by calling around as if he/she were a potential client and learn what your rivals say on the phone to her around pricing. She might need to call from her home phone to prevent caller ID. As another alternative you might have him/her call other assistants or paralegals at your competitors and use to exchange your charges for their costs or you might do that with other attorneys yourself in your market. If you truly want to enter it and have maximum information you can write possibly a few dozen rivals in your marketplace and state you are doing a charge study and if they would send you their fee list you will produce a composite list that does not recognize those responding and send them a copy of the outcomes. To keep it easy for them include a stamped, self-addressed envelope with a list of the most common services offered in your practice location. Now you will see what people are charging for services comparable to those you provide. You should have the ability to come up with a series of costs. Use this range to set costs for your own services. My recommendation in law company marketing planning is to charge at the 75% level Get More Info of the list. You should be at or in the leading 25% of the costs.

Remember that in general it is not a excellent law practice management strategy to contend on cost. Many possible customers will see rates that is too low as a signal that there is something missing either from the service, the provider, or the company.

The Cost Method in Law Practice Management Pricing

This law practice management pricing approach is really simple actually. The most common mistake in law practice management using this technique is to neglect to include some form of your expense.

OK, let me state it once again. In law practice management frequently you count yourself out of the costs and you should include yourself in the costs. Why? Often you are doing a minimum of 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 profit. Yes? If you are all three of these in one, you must think about one salary 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. So make certain to include a reasonable cost for your technical and managerial work in the costs part of this formula.

Fixed Rate Method in Law Practice Management Pricing

This is the technique utilized by lots of vehicle mechanics (it is called "the flat rate book") and other company. This method is where you determine a set rate for numerous tasks and charge that rate no matter what. He makes more if the mechanic invests less time than allocated for the job. He makes less if he invests more time than allotted. In the end, it all evens out (well, typically to the mechanics' favor if you ask me). Another example utilizing this technique is how managed health care has actually used this system with healthcare facilities and physicians . Attorneys can utilize this system if they prefer.

The "Rule of Three" in Law Practice Management Prices

This " general rule" called the "rule 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 Certified Public Accountant 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 quantity of salaries/bonuses (not advantages just wages-- benefits enter into the 2nd 3rd following) for the revenue generators and/or timekeepers (this includes you if you are creating revenue) and call that our first third. So accumulate the incomes of the legal representatives, paralegals, and legal secretaries who generate revenue or are timekeepers and call this your first third (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 third which we will call your "overhead" (thus that second third is $100,000 and don't forget you if you are doing some managing partner type duties since that part of your time goes here in overhead). Take that exact same number and we will call that your last third, which we will call gross earnings (another $100,000). What you require to do is take the total amount (in this example $300,000) and now find out just how much you must charge per billable hour, per repaired rate or how lots of contingency charge cases won to be sure you hit the target we should hit given our very first third number times three (in this example $300,000).

This approach shows you just how much per hour you need to charge. Since you understand the number of billable hours each profits generator can do per month, just divide that into your overall of all thirds ($300,000) to see what you need to charge per billable hour to make your numbers come out properly. As long as you strike your targets you will be assured of a 15% to 30% net benefit from your operations. After all if you are the owner of the practice you are worthy of a fair revenue too do not you agree? This method is known as the Rule of 3. , if this technique is a bit too complicated do feel complimentary to contact me and I will help you sort it out in a couple of minutes on the phone.

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It is a great idea to analyze all of these prices approaches in identifying your law practice management prices method prior to setting a cost and moving ahead with a law office marketing plan to ensure you are thoroughly exploring all options. Keep in mind the propensity for most attorneys is to price too low. Don't do that! In another article I will tell you how to speak to potential clients so you never ever have a issue getting the cost you are worthy of.

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