Implementing Alternative Fee Agreements at Your Law Firm
3 Ways to Improve Value for Clients
1. Diversify your Service Offerings
Rarely does a one-size-fits-all approach work in the legal industry, but that doesn’t stop many firms from pricing services as if every potential client is a complex matter requiring a five-figure retainer. Recognizing where you can right-size services based on client-specific requirements is one easy way to help clients feel like they’re getting the best possible value for their spend.
Using an example from estate planning (although this logic applies to plenty of other practice areas), some clients will only require a basic will, healthcare directive and power of attorney. That client’s needs can be met with a couple of documents and relatively little time from staff. Other clients will need several consultations to sort out trusts, requirements for charitable giving and more details. If you’re not already offering tiered pricing that recognizes those differences, that can be an easy place to start.
2. Improve Internal Processes
Just because you’ve “always” done something a certain way doesn’t mean that’s automatically the best way to do it. Times change (along with staff and technology), and if you’re not periodically reassessing whether there are better ways to deliver services at your firm, then it’s almost guaranteed there’s room for improvement.
Process mapping enables you to visualize each step in your internal processes by identifying who is responsible for different operations and where decisions need to be made. By mapping out each step, you can easily see where you have bottlenecks and other inefficiencies. Once you know which processes are underperforming (wasting staff time or causing pain points for clients), you can create a plan of action to make those run more smoothly.
3. Leverage Technology
As you consider your service tiers and internal processes, one of the keys to successfully improving profitability is ensuring predictability of service delivery. If you’re going to offer a less expensive version of an existing service like an estate plan, the key to making it profitable is knowing that the firm is able to consistently deliver the same product in a repeatable manner. This is where technology like document automation can help solo, small and mid-size firms solve for downward pricing pressure.
Legal documents are the foundation of your practice — from fee agreements to invoices and everything in-between — so it makes sense to consider how easy-to-use, no-code document automation software like Clio Draft can help you deliver your existing documents more quickly and avoid errors compared to manual “find and replace” methods. Rather than making more time in the day, it’s a matter of using the time you have more effectively.
If you can deliver the same quality documents and services more predictably and more efficiently, then it allows your firm to operate profitability. This enables you to price your services based on the value you’re delivering to clients rather than trying to shoehorn different sizes of projects into a pre-determined number of hours. You can deliver higher-quality services and documents faster than the competition. That’s something clients will notice.
Maybe it’s time for your firm to consider the ways document automation technology can improve profitability, save time, and reduce errors for routine drafting.
