By Jared Correia, IndyBar Law Practice Management Consultant, Red Cave Legal Consulting
Although lawyers often guess about what legal consumers want, there are very specific and discoverable things that legal consumers want from lawyers. Knowing these things can allow you to convert more clients.
One of the things that legal consumers want from law firms is to know the total cost of legal services. This doesn’t mean your hourly rate, because that’s uncapped. Consumer and corporate legal consumers are also getting wise to the fact that hourly rates actually promote inefficiency. I mean, think about it: the more hours you bill, the more money you make: So what’s the incentive for working fast? There isn’t one; in fact, there’s a disincentive for doing so.
The job for modern lawyers is to meet and exceed client expectations. So, if you know (and now you do) that clients want to know the total cost of representation before engaging a law firm, how do you provide for that?
It’s difficult to do with hourly billing, for sure, but it becomes easier if you offer alternative pricing models, like flat fees, risk collars (client pays a discounted rate if you go over an hours estimate; you come under that hours estimate and you get a bonus), limited scope representation (you break the representation into components and only represent clients for single parts of the representation at any one time) and subscription services (like technology vendors use).
Reformatting your billing system is not an easy thing to do, but it may make your client conversion a whole lot easier. And, if you can find the right value proposition, the new system will work out for both you and your new clients.
If you want to reformat your pricing, we can help.
The IndyBar offers FREE law practice management consulting services for Practice Builder subscribers and IndyBar members through Red Cave Law Firm Consulting. To request a consult, visit indybar.org/lpm and start running your law firm like a business. •