Setting a Subscription Fee for Legal Services - Part 2

Original LinkedIn post here.

Setting a Subscription Fee for Legal Services - Part 2

(See link below to Part 1 for how to define the scope of your practice).

Now that you've defined the scope of your service, how do you set the fee?

The Subscription Fee Approach attachment spells out exactly how we did this at our (former) technology transactions boutique, so I'll just add a little color:

Get to know each other first. When we first switched to fixed-fee we'd find ourselves spending the first 45 minutes of an hour pitch talking about fee. We realized that we couldn't talk effectively about pricing until the client knew if we could solve their problem and we knew what they were like to work with. This led to the "Exploratory Month" (billed at $1K less than the monthly minimum) before the pricing discussion. And if at the end of that month either of us felt we needed more information, we'd extend it for another month. You can't have a productive conversation about price when the buyer has never seen the service.

The firm must anchor the conversation. As a law firm, if you want to move your client off the billable hour, you need to do the work. You have to anchor your fee system in a methodology that ties back to some sort of hard metrics around the value you provide and that allows the client to feel pricing to them is fair when compared to others. You can see how we approached that in our pricing schedule and benchmark reports, but whatever your approach, build the golden bridge for the client.

Don't mix and match. If you are serious about fixed-fee, you need to stop tracking time (internally and externally). Counting deals or types of services accessed is fine, but drop the hours or you'll end up with the worst of all possible worlds.

A loose hold can last a long time. Our client's commitment was always month-to-month, but we averaged an eight year tenure and operated with a waiting list. You only get one reputation - guard it by making sure that every client paying you is happy to do so.

Yes, this applies to you. I see you in the back there. You are nodding your head along until the end here and now you do a quick shake. There is something special about your firm, your practice, your clients, that means you can't do this. Just to note, when we closed the firm we counted two of the seven largest companies in the world among our clients (and they had been with us, every single month, for years). And 80% of our invoices went out current.

Give fit a try! The worst that can happen is you go back to exactly how you do it today.

Read Part 1 here.