There has been growing resistance to the long-standing billable hour by clients (with good reason) for several years. As a result, the legal services industry is in flux. Some law firms will adapt in order to thrive and others will not. Loop Legal was formed for precisely that reason – to offer clients a real alternative to the long-standing flawed model.
The natural question when rejecting a long-standing “truth” is what else? How do you build an entirely new pricing structure? There are experts who build their entire careers around pricing. Basically, our experience has shown that the right pricing model is a mixture of data, psychology and experimentation. Consider the following when tackling this complex problem for your organization:
- Research the Current Market
Innovation cannot happen unless you understand the current situation. Researching the current market enables an appreciation of what the customer is accustomed to and the average cost. In legal, we found it was too mysterious and far too expensive which forced customers to seek alternatives. Here are a few tactics to consider when performing your own market research:
Be specific. The more specific the intel the better. Pricing for a criminal lawyer when you offer real estate services has no value. Think about and seek out the nuances in a niche market.
Seek out alternatives. Look for pricing from a range of organizations and services. Understand the high, low, average, and bundled approach.
Aim for a decent sample set. There are always outliers. Performing research requires a decent set of data in order to draw valid conclusions for your organization.
- Identify Trends in Pricing
Data from the market intelligence is only useful if you actually do something with it. This can be overwhelming, but you have to start somewhere in order to create a viable pricing model that will be received by clients. Ways to tackle the challenging task of identifying trends:
Use a whiteboard. Start-ups, homicide detectives, and teachers take this approach for a reason. Graphical representations with a brain-storming focus can yield big breakthrough.
Put the information into a spreadsheet. Pricing is all about money and calculations. Save your brain power for the big picture and use the functionality of excel to do the math.
Segment the information. Deconstruction makes it possible to see the bigger picture. Trends will start to jump off the page if you think small.
- Establish Organizational Values
The values of your organization should be reflected in the pricing model. Put your mission statement to work and integrate those principles in to every aspect of the organization. Clients will not know what those values are unless you demonstrate it to them repeatedly. Examples of how to apply the company values to pricing include:
Transparency. Loop Legal takes the approach that attorney-client relationships work best when they are completely open. As a result, clients know the full price up front before hiring us. We even go so far to put some of this information on our website.
Accountable. Loop Legal shares the vision of its clients and understands that accountability is essential to success. This is reflected in pricing by establishing the amount up front and sticking to it.
Responsive. Communication is essential to achieving results. Loop Legal integrates this philosophy into pricing by having a conversation up front. Talking about price does not cheapen services, it merely serves to put everyone on the same page at the beginning.
Pricing can be complicated. This is true when pricing legal services, medical devices, SaaS platforms, or any other item. Loop Legal understands this challenge first hand and also knows how to integrate that information into helping clients reach their goals. Contact us today to schedule a consultation to talk more about how the Loop Legal attorneys can help your organization.