By Jared Correia, Red Cave Consulting
Law firms have traditionally extended credit to clients by billing in arrears. This is, in fact, the most common way for law firms using an hourly billing model to invoice their clients. That’s why you hear advice like: Make sure to get the most you possibly can upfront/charge the most significant retainer you can.
But let’s be honest: That’s not a client-facing model. That works for law firms, sure. But if I’m a legal consumer, I’m not into paying a lot of money right away, before my service provider (in this case, the law firm) has even proven itself. It’s kind of the opposite problem that attorneys who bill hourly face.
So, this becomes a difficult balance to strike: How much can you charge clients right away? And how long can you wait before you bill them next?
Well, this is, in part, an argument for taking credit cards, via e-payment models, because that allows law firm clients to pay more upfront and removes the creditor burden usually placed upon the attorneys — that shifts to the credit card company.
But this also illustrates the viability of newer school law firm pricing models, like products, subscriptions and evergreen retainers.
If your pricing model needs a refresh, give us a call.
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