In this three-part series, we’ll discuss how lawyers should talk to today’s legal consumers across three primary areas of interest: money, expertise and the legal process. These are the categories in which legal consumers have the most urgent questions. And, it’s imperative for law firms to increase their chances to convert leads to clients by addressing each of these broad topics in ways that place the law firm in the most favorable light possible. In part 1, we’ll cover how to talk to potential clients about money.
As Wyclef so eloquently said: ‘dollar, dollar bill, y’all’. For lawyers and for law firm clients, it’s all about the Benjamins. And, there’s a consistent tension in that relationship. Law firm clients want to pay as little as possible for legal services; lawyers want to make as much money as they can for their businesses. Largely, pricing and paying for legal services is one, big compromise. And, that subtle dance of negotiation takes places at various points of the intake process.
In the first instance, the law firm will have to decide whether it will charge a consultation fee. There are two, very vibrantly opposed schools of thought in this area. Lawyers are often vehemently on one side or the other. Of course, there isn’t necessarily a wrong answer. For some practices, paid consultations can work, if only as a mechanism for pushing off tire kickers. For other law firms, they may want to take on all comers, and are willing to spend time personally vetting individuals, or doing the same thing via a software tool, in order to find the diamond in the rough. This is especially true of personal injury attorneys, whose potential clients may have impaired communications, but whose cases can end in large settlements. Whatever your position, however, your law firm should be clear about whether a consultation fee is required; and, if one is, your law firm should be equally transparent about how it is paid, and when, and whether the consultation fee would be returned to the potential client if the potential client shows up to the prescreening meeting or if the law firm is retained by the potential client.
Actual fees for legal services, to be paid by clients, are far more regulated than consultation fees, of course. There are specific requirements to include the rate or basis of fees in an engagement agreement. However, many law firms sign clients on without taking the time to go over those expectations in a coherent way. For many law firms, the desire is solely for the conversion of the retainer. Once that’s in hand, the dialogue stops, and the client never hears about money again, aside from getting requests to pay. On the lawyer’s side, this desire to acquire the engagement as the primary objective leaves law firms very willing to discount, in order to get a client signature on an engagement agreement. For clients, lack of law firm transparency on pricing leads to inevitable surprise and upset over unexpected bills. For lawyers, continuous discounting is a major culprit for revenue leakage. Law firms should endeavor to cover all aspects of rates and fees with potential clients up front, and assure their understanding of all aspects of the fee structure prior to engagement. If an in-person meeting is in place, broadcast relevant sections of the engagement agreement to a large screen. Explain how a retainer works, as well as its relationship to trust accounting principles to which lawyers are required to adhere. Explain further how continuous billing will commence, and outline payment options. Also, address escalation measures for unpaid bills. Make sure your clients know the nooks and crannies of your billing processing before they buy the English muffin. And, stick to your guns. Create a rate sheet, including a discounting structure, and do not deviate from it, no matter what. This will ensure that your actual revenue better matches up with your revenue projections.
Having a rate sheet in place that you can rely on also helps the legal consumer, if it is constructed in the right way. Legal consumers have more options for attorneys than ever before, and they have more options for getting connected to those attorneys than ever before: both directly, and via lead generation and referral portals. In other words, law firm clients can shop around; so, as a modern lawyer, you’ll need to know how your law firm’s pricing matrix fits into the wider legal ecosystem. Even so, most law firms’ prices for specific localities being about equal, consumers are motivated to work with lawyers they believe are experts and whom they like, assuming one request for pricing information is met: potential law firm clients want price certainly, because they get it everywhere else. Think about it: a consumer in the wider marketplace knows exactly what they’ll pay for Netflix, each month and each year. Law firms almost never provide that level of price certainty. And, quoting hourly rates without an endpoint is not what I’m talking about here. It’s meager comfort for a consumer to be told that a law firm charges $450/hour until . . . the end of time? That’s not going to work, because consumers want price certainty with respect to the total cost of representation. That’s difficult to provide in the context of an hourly billing arrangement; but, with respect to flat fees and alternative billing models, like subscription services and legal products, price certainty is readily available. It’s just a matter, in those cases, of determining the respective value of a law firm’s services in a different way: via a method that respects modern legal consumer demands.