Alternative Fee Arrangements May Help You Attract Clients
Guest post by Lawyerist.com
These days, lawyers face stiff competition from other lawyers in most markets. That means it is often tough to stand out and attract and retain clients.
One of the ways you can set yourself apart and offer added value is to consider alternative fee arrangements for your clients. Alternative fee arrangements can help you be more client-centric, offering what a client needs rather than being wedded to what your firm has typically offered.
Most lawyers think of flat fees as the only alternative to hourly billing. While flat fees are indeed an alternative form of billing, there are a wide variety of alternative fees, including subscription pricing and unbundled services.
Subscription services might seem like an odd choice for lawyers, but as they have become increasingly popular in other arenas—software, makeup, even clothing—clients may be amenable to that fee structure. A subscription service is ideal for clients that have regular and predictable needs, like a title closing company or a client that needs you to monitor regulatory filings. Essentially, you can set an average and design your monthly fee around that, much like a salary, as long as the fee is not excessive (see Rule 4-1.5(a)). Done right, it provides a steady income for your firm and predictable costs for your clients. The key to a subscription model, however, is to avoid mission creep—the temptation to roll more and more services into the monthly package. Let your clients know that services beyond the scope of the monthly package would be an additional charge and would be negotiated as needs arise.
You can also “unbundle” your services, offering limited-scope representation. You provide a well-defined fixed-fee service and the client understands that anything outside of that scope will be handled by them (or another attorney if they so choose). This works well for things that you do routinely and can easily predict the scope and duration of, such as incorporation services or drafting employee handbooks. Rule 4-1.2(c) permits unbundling of legal services as long as the limitation is reasonable, and the client gives informed consent in writing.
Being open to alternative fee arrangements can help you stand out in a crowded market and provide the services your clients want at a price they can understand.