Financially Legal

What are subscription legal services? (Part 1)

Posted by Dan Lear on September 23, 2020
Dan Lear

Note: This is the first in a series of posts on the what, why, and how of subscription legal services. We at Gravity Legal recently launched a suite of tools that make offering subscription legal services easy. If you'd like to learn more, contact us here.  

We also have two episodes of our Financially Legal podcast on subscription legal services featuring lawyers who have built and are offering subscription legal services. Check out those episodes with Jon Tobin and Kimberly Bennett.

If you bill time on an hourly basis for long enough you begin to ask yourself some troubling questions: Should I DIY remodel my bathroom? Or are those 70 hours better spent billing clients at an exponentially higher rate of return, while I pay a plumber to screw the job up better than I ever could? Should I do my own laundry? Or should I bill another client? Should I walk the dog? Or should I set the dog adrift on an iceberg into the ocean, saving myself countless hours that could be used to bill clients in the future?

But billing by the hour isn’t the only model. Many firms, particularly small to medium-sized firms, utilize flat fees. They often start by counting the billable hours put into similar matters and then multiplying hours spent by an hourly rate to estimate what the flat fee should be. This isn’t a bad place to start, but if you do adopt flat fees, you’ll quickly discover that, while flat fees can have some significant advantages over hourly billing, they sometimes force you to trade efficiency for thoroughness and don’t provide the kind of trusted advisor relationship that many lawyers are seeking with their clients.


Enter subscription legal services

Over the last few years, a number of lawyers have realized that they can strike a meaningful balance between client relationship and economic opportunity with legal subscriptions. While the definitions vary, most legal subscription arrangements involve a monthly subscription fee that provides some amount of legal support on an ongoing basis. In some cases, these plans offer unlimited consultations with an attorney. Basic services in that practice area, like contract review, are offered for a flat monthly rate and major projects are tackled through a separate billing agreement, either through a flat fee or hourly rate. Other legal subscriptions offer a more comprehensive suite of services, like general counsel services, that don’t necessarily have “upsells” to contract reviews or major projects.

This post is the first in a series on subscription legal services. Most lawyers are familiar with the notion of a subscription (legal or not) but selling legal services by subscription, while totally doable, can be hard for some to imagine. That’s why this first post will provide some examples of lawyers and law firms offering subscription legal services. We also provide some answers to some basic questions that lawyers often have, including the inevitable ethics question, about this business practice.


The surprising benefits of subscription

One obvious benefit of subscription-based legal services is a recurring monthly income. That means you’ll have money coming in even when seasonality or a pandemic-recession might cut into your business.

There are surprising benefits to subscription-based legal services as well as well: Jon Tobin, of Counsel for Creators, who has become a sort of spokesperson for lawyers offering subscription legal services, mentioned in the excellent “Lawyers Gone Ethical” podcast with Megan Zavieh, that he found that the subscription model actually greatly benefited his clients because they became more proactive about their legal issues. Instead of waiting for something to snowball, they would pick up the phone for a quick consultation without fear of being billed to death one hour at a time. A problem that would eventually snowball into a dozen or more billable hours could instead be handled in 15 minutes with a proper preventative solution.

Additionally, from a business development standpoint, once you have a critical mass of these clients paying a minimal monthly fee for your advice on small matters, when anything larger comes up, you are the first person they are going to call.


Could this work for me?

Intrigued by the idea? Though at first glimpse, you might think that it isn’t a great fit, the truth is that the model can be adapted about as far as your imagination will take it.


Business and beyond

Obviously, subscription legal services are a great fit for firms with established ongoing relationships with clients. Some of the other pioneers in this new model include business law attorneys Jess Birken and Kim Bennett, and Food Law attorney Jason Foscolo. (Food Law, of course, being shorthand for restaurant and food production regulatory law - just the sort of field begging for the regular input of a seasoned counselor — pun intended.)

But subscription law isn’t limited to businesses. You might think that divorce law is a poor fit: few people get divorced regularly enough to subscribe to a legal service. Despite that, Lee Rosen of North Carolina was a pioneer in the subscription legal services space — his firm mixes flat fees and subscription services to disrupt the traditional divorce law model. For $199 a month, a client gets access to a wealth of webinars, calculators, forms, and other resources along with unlimited access to an attorney, to help guide him through the divorce process, sort of a DIY-lite.


What about bankruptcy or, even, QDRO?

The limit of subscription legal services is really only your creativity. Bankruptcy? If you handle small business bankruptcy, many of those entrepreneurs will want to try again once they’ve cleared the shackles of debt. Maybe you can offer a subscription to bankruptcy and financial rebuilding for individuals and small businesses? You could also approach a bankruptcy subscription the way that Lee Rosen approaches divorce – a DIY-lite – or offer a subscription that’s akin to an installment in some way.

Perhaps you practice something really odd, like retirement division after divorce. These QDRO attorneys do one thing, and one thing only: draft court orders that comply with federal ERISA law and state substantive divorce law to divide a retirement account pursuant to a divorce agreement or judgment. It’s a narrow niche, and only a handful of them do it. Can a one-and-done transactional practice like this be turned into a subscription?

Willie Peacock is certainly going to try. The vast majority of a QDRO lawyer’s business comes from referrals from other attorneys. As he reviewed more and more judgments from attorneys in seven states (his wallet is stuffed with bar cards), he noticed a trend of attorneys mislabeling retirement accounts, or not understanding the true value of what these accounts are worth. Many simply write some variation on “divide account by QDRO” into the divorce settlement and leave it to the client to find out what a QDRO is 10 years after they get divorced.

Instead of shortchanging clients and leaving one of their most valuable assets unaddressed in a divorce, why don’t these attorneys subscribe to a service where they can consult with a QDRO attorney while the divorce settlement talks are in progress? The QDRO lawyer will make sure everyone understands the types of benefits available, the values of those benefits, and what the options really are for division. As a bonus, the QDRO can be drafted while the divorce is still pending, so that everyone’s rights are secured before they walk away from the table.

These lawyers do not have to become masters of an obscure legal niche, and can be assured that they are handling their clients retirement assets with care, while Willie is basically locking in near-exclusive rights to these attorneys’ QDROs and making his job in drafting those orders easier by getting everyone on the same page before the divorce is finalized, rather than trying to decipher a poorly written settlement agreement 10 years after the fact.


Subscription, expertise, growth, and your "supply chain"

Beyond enabling consumers to get greater access to lawyers, both Peacock and Zavieh show that subscription models can be used by lawyers selling to other lawyers, granting them access to additional expertise, growing their business and strengthening their “supply chain.” Mike Whelan, in his recent book Lawyer Forward, spoke of a legal supply chain model in which, instead of everyone churning out billable hours, lawyers choose to become experts in their field and commoditize that expertise. Instead of lawyers having to know everything about broad practice areas, they could associate in their “supply chain” with other niche experts to ensure that their clients get the best tidbits of expertise from multiple people, rather than lesser expertise from a generalist.

As you can see, the subscription model is a flexible idea. You may think of your clients as “one-and-done,” but attorneys have already applied this model to family law and transactional matters, in addition to the obvious business clients with recurring legal needs. Consider your practice area: is there a way to shape a subscription that will benefit the client, either though proactive resolution of minor legal matters, or through dividing up a major cost into a recurring smaller subscription price?


Isn’t this just a retainer?

If your first thought when hearing about this was, “It sounds like a retainer,” you aren’t alone.

Zavieh, who offers her own subscription-based plan for other lawyers (given the name of her podcast, you would be unsurprised to know that she is a legal ethics attorney), described the difference between a lawyer-on-retainer and a subscription service: while a lawyer-on-retainer secures availability for the fee but does not include or guarantee any services, the subscription service is a payment for services that you may or may not choose to consume. It is a narrow distinction which leads to another ethical question: if you are charging monthly for these services, but the client does not use them, isn’t that an unconscionable fee?

Tobin said that he initially had that same concern: is it fair to charge a fee for services that may not be used? While most of us would fear clients abusing an unlimited legal service subscription, he found that the opposite was more likely to be true: they would forget to use it. That concern is why he provides webinars, legal information resources and newsletters, and proactively reaches out to the clients quarterly - at a minimum - to encourage them to use their advice services regularly.


What next?

This “subscription thing” sounds interesting. You generally understand the idea. It seems that a variety of different firms have offered it, but, maybe, you’re still not convinced. We’ve got you! Next in this series, we’ll dig in on the benefits of a subscription legal practice, including a deeper discussion to help you determine if this model is something you could use in your firm.

Image credit: “Subscription” by CreditDebitPro.com is licensed under CC BY 2.0.

Topics: Subscriptions

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Financially Legal is a twice-monthly podcast on the finance and economics of entrepreneurial law firms and lawyering. Host Dan Lear talks with law firm leaders, academics, business professionals (both in and outside of law) and thought leaders to provide compelling and provocative content at the intersection of finance, economics, and law.

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