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Managing

Capsized: The Next Law Firms Will Dominate by Selling Subscription Services and Products

By Jared Correia

A lot of lawyers and law-related personalities talk about the “justice gap” — the notion that there is a massive unmet need for legal services. Cue: Much puzzlement about how to solve said JUSTICE GAP (ALL CAPS). But the gap between lawyers and clients is even more massive than most lawyers acknowledge, and than most consumers of legal services understand.

The fact is, there has almost always been a massive gulf between what lawyers think they know about what consumers want from them and what consumers actually want.

In almost every instance where a legal service is provided, consumer expectations won’t be met. This is true of the so-called justice gap; it is true for legal services; it is also true for those desirable higher-income consumers who are already paying for legal services. It’s been demonstrated consistently, and in increasing measure, that failure to adopt modern technology and provide credible onboarding services actively cuts against consumer expectations for speed and efficiency. What many lawyers don’t seem to grasp is that their failure to align their processes to consumer expectations has cost them significant market share.

If traditional legal services provided by actual lawyers is like the polar ice cap, you don’t want to be the last baby penguin standing on it when it melts.

But, even if global warming can’t be reversed, trends in legal services can be. Even if it takes a new generation of lawyers willing to adopt premises and act on them in ways their forebears would never have considered or understood.

The Price Is Wrong

I’ve written before about how I think the billable hour sucks. Even so, the vast majority of law firms sell their services on a billable hour model. Of course, this is all symptomatic of the disconnect between lawyers and consumers. Modern consumers want, and are given, price certainty. If I want to buy a Netflix subscription, I know exactly what I want, and exactly what I get. If I’m going to Lowe’s to buy a lawnmower, I’ll look up the price online first, and expect them to match what I found. If I stop at a kids’ lemonade stand, I know I’m getting an extremely sugary drink (that may or may not be lemonade) for $1.

Law firms don’t operate that way. The law firm version of my Netflix subscription would end with an insanely high monthly bill after I binged “Stranger Things” and “The Haunting of Hill House” in the same month. The law firm version of my Lowe’s lawnmower contains unexpected add-ons I’m billed for unexpectedly 19 months later. The law firm version of my lemonade … well, I don’t even want to talk about it.

Consumers who want, and know they can get, price certainty are greeted by lawyers who tell them, “Well, I have no idea how much this is going to cost you.”

In many ways, the internet was the worst thing to ever happen to law firms because consumers are so much savvier now, and also so much more impatient. If a modern consumer hears from a lawyer that she “doesn’t know how much this is going to cost,” that consumer will do two things, in order:

  1. See if any other lawyers do know much it will cost.
  2. See if any service providers who are not law firms can meet their needs.

Enter market participants like LegalZoom, which every “real” lawyer hates but also secretly envies.

And lawyers know this is bad business. That’s why they write off so much hourly work. Because they understand that clients aren’t willing to pay at the level to which they need to bill in order to justify a traditional hourly practice. So why bother?

The byproduct of this is that lawyers work too damn hard for too little money. Consider the relatively small amount of collected hourly revenue you make in your practice versus what you charge. And if you don’t know that number, you may not want to look, because I guarantee you it’s fugly.

Would that there was a way to charge in a more consumer-friendly fashion while deriving truer value for your work — while also creating more control over your schedule.

Well, will you look at that:

Product Placement

Admittedly, it was cruel of me to write about how much I loath hourly billing and not provide any outs. There are other ways to bill — two of which are gaining adoption among law firms and which, I believe, will become standard practice for firms in the mid- to second half of the century. (I’ll probably be dead when this does, or doesn’t, come to pass, which is absolutely the best way to make lame predictions.)

So, let’s talk about subscription services and products.

Subscription Services

The same thing that makes subscription services appealing to other industry services providers should make them appealing to lawyers: It’s the kind of fixed-cost offering that modern consumers lust after. But lawyers only dabble in subscription services, cut the cord too quickly, then complain that it would “never work in my practice area.” Stop the presses: Subscription legal services can work in any practice area that is not contingency fee-based. The challenge is creating the right value proposition.

What is the package of services that you need to offer to make your subscription services work for you, as well as for your clients?

  • Some law firms limit subscription packages to monthly hours totals, like cellular service.
  • Some include advice and consultation options.
  • Some offer products alongside traditional legal services (more on that in a moment).

The challenge of creating subscription pricing arrangements is also the exhilarating part: There is no template, which means that you can make the template. The mix is different for each individual law practice. And while it’s easier to create a subscription model if your firm specializes in outside counsel services, it’s definitely not impossible to manage a similar trick for other practice areas.

Isn’t it cool to create the mold for once, rather than copying it?

Productize

Now, if you really want to break the record, rather than being a broken record, you’ll take things a step further and consider the sales of products through your law firm. You’re likely a lawyer if you’re reading this, so I probably don’t have to explain to you what a service-business model is. However, converting services to products may be a more difficult leap to make — after all, it’s not like you can turn your legal services into a Chevrolet Chevette.

Now, if you’re having some actual trouble thinking about what a legal product could be, consider what your nonlawyer competitors have taken from you. You could sell documents like LegalZoom, right? You just don’t. Why not? Because your clients will pay more for your advice and the documents. But what about clients who don’t want to pay for your advice, but just want the documents? Consider this large law firm in California that is absolutely crushing it with an app that guides businesses in complying with the state’s data privacy regulations.

The advantages of “productized” legal services for consumers are obvious: predictable fees and expediency. But the advantages for law firms are significant as well. They include a reduced need for in-person lawyer time (the drag of any service business) and access to a market of consumers they can’t reach right now. If I told you 20 people would pay you $50 each for something you can give them once, but only four people would pay $250 each for something you had to keep giving them, the choice is obvious, right? And that’s if the money’s even. If you can expand your consumer market broadly enough with product offerings, I got news for you: The money isn’t gonna be even. It’s gonna be even better.

For a handy guide to what productizing is and means, check out this informative article, including examples. And here’s advice on the topic from real CEOs.

If you can begin to mix and match subscription services and products within your firm, you may be able to jump right into that justice gap, and have a pleasant swim.

Modern law firms will eventually tailor their pricing plans to consumer expectations; it’s merely a question of when. Maybe “when” for your law firm is today.

Illustration ©iStockPhoto.com

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Jared Correia Jared Correia

Jared D. Correia is CEO of Red Cave Law Firm Consulting, which offers subscription-based law firm business management consulting services, and works with legal vendors to develop programming and content. Jared is also COO of Gideon Software, Inc., which offers intelligent messaging and predictive analytics software built exclusively for law firms. A former practicing attorney, Jared is the host of the Legal Toolkit podcast and speaks frequently at industry events. In addition to his Attorney at Work column, Managing, he writes an advice column for Lawyerist and on tech startups for Above the Law. Follow him @JaredCorreia.

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