With technology, law firm subscription plans can produce steady income and better serve clients
From left: Kimberly Bennett and Lauren Lester. Photo by Victor Li.
Lawyers looking to institute a subscription-based model should follow three rules: ditch hourly billing, invest in technology before labor, and give clients what they want.
Thursday at ABA Techshow at the Hyatt Regency in Chicago, lawyers Kimberly Bennett and Lauren Lester went through the basics, citing examples from their own subscription-based firms as well as well-known companies like Netflix, Spotify and LegalZoom, which have subscription models. At the panel titled “You’re So Predictable: Subscription Legal Services,” Bennett, an Atlanta-based trademark and business lawyer, and Lester, a Colorado family lawyer, touted the benefits of subscription models as a means of developing a predictable stream of income while creating a more efficient and flexible practice.
Lester, citing the 2019 Clio Trends Report, added that lawyers were billing 2.5 hours a day, and of those, only 1.7 hours were collected. “That’s not a sustainable business model because you’re not getting paid for the other six-plus hours in the day” she said.
Instead, Lester noted that 76% of responding clients wanted to know how much legal services would cost before they engaged an attorney. “Maybe it’s not a process issue, but maybe it’s the fact that clients aren’t seeing value because they’re not getting the cost until the end, after the work is done, and maybe they aren’t willing to pay it,” Lester added.
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Having a client-centric plan is also good for business, they argued. Bennett said subscription-based businesses like Spotify, LegalZoom and Netflix are succeeding by listening to their clients and giving them what they want.
“LegalZoom has proven that the subscription model works,” she said. “There are lot of clients out there that are happy with it. Some might not be and will hire a lawyer. But most are happy. I look at LegalZoom as research and development for me. They can show us different things, and I can test and tweak things that work for my business.”
Using technology to keep overhead as low as possible while allowing lawyers to work more efficiently is a must if you’re going to set up a subscription plan, Bennett said. That means document automation software, practice management tools, and e-payment programs, at a minimum. “Our greatest strength is as an adviser and issue-spotter,” she said. “It’s not creating documents.” (See also: “One Size Does Not Fit All.”)
For lawyers interested in setting up a subscription plan, Bennett cautioned that they must first go over their books and figure out what kind of firm they are before implementing wholesale changes. “You must understand what’s happening in your business now before you decide to go to a model like a subscription later,” she said. “After all, you’re not going to design a subscription that’s not profitable.”