Should You Run a Subscription-Based Legal Practice?

Securing revenue is a common pain point among many legal practices, whether it’s a lack of consistent clients or an inability to generate payments. 

This problem is even more impactful among sole practitioners, who cannot rely on other teams with more active projects to “carry” the burden of lost profit. In 2021, a Clio legal trends report estimated that up to 16% of all billable hours are not invoiced, and up to 11% of any invoiced billable hours don’t even get paid. In many cases, this financial hurdle can be so significant that it can hurt your bottom line.

As it is, many law firms are already struggling with a global recession, competitive talent searches, and the changing tides in client preferences. As a result, several law entities have already downsized. According to Reuter’s article on the legal industry, three major firms decided to separately pull back from US cities earlier this year. This is on top of the 119 domestic law offices from the top 200 American law firms by revenue that have closed in the last three years.

With this in mind, a subscription-based legal practice is an increasingly viable and timely solution. As a business model that is designed to simplify client retention and safeguard billing, subscription-based offerings are poised to help legal practices bridge revenue gaps and improve profitability.

How do subscription-based legal practices work?

Subscription-based legal practices work by offering clients a flat monthly fee. Within this fee, clients are privy to a series of services to be determined by the firm or practitioner they’re working with. Unlike the traditional retainer model wherein clients must pay ahead and then lawyers bill their hourly rate against this, subscription fees are billed every month at a pre-set time. That said, subscription fees can be easy for clients to overlook and confusing for financial departments to manually oversee if your firm is dealing with many legal “subscribers.”

As such, it pays to invest in an automation solution that can streamline this. Legal practices can use SOFTRAX’s subscription billing software as it is designed to transform modern businesses by handling all levels of billing. It is a customizable billing platform, so companies can easily tailor aspects like frequency, pricing scenarios, and terms without having to manually work on these for every transaction. During a pre-set billing process, the software can also automatically craft and send out batch invoices and deliveries. For legal practices, such automation software ensures that billing periods are properly honored without the complexities of calculating, presenting, and then charging for billed hours. In most scenarios, a subscription model allows clients to maintain a set service “plan” until such a point wherein they may want to scale up or avail of add-ons that can also be tucked under the existing agreement.

Benefits of legal subscriptions

Simplification is the biggest boon that a legal subscription model can offer both practitioners and clients. For starters, rather than having to draft complicated contracts per agreement, subscription models offer a ready-crafted service plan. This is less intimidating for many clients and also easier to manage for legal offices. Consequently, this helps lawyers achieve better work-life balance since they’re no longer pressured to churn out extra working hours or rush to create entirely new service agreements from scratch. Internally, this also serves to improve talent retention, which is a growing concern among many firms. As per The Financial Times’s post on lawyers’ pay, many US law firms have struggled with high attrition rates as younger talents prioritize well-being.

Similarly, a subscription model’s more approachable terms can help foster positive client relationships. After all, clients are always more likely to patronize a provider who they trust and feel comfortable with. In the future, should these clients require more high-profile representation, the law firm that they hold in good standing has the biggest chance of being onboarded. This means you’re not only cementing current revenue but also paving the way for more growth and profit. 

What services can your subscription-based legal practice offer?

Because subscriptions already offer a pre-determined set of services, it means that clients can take advantage of these aids at a virtually unlimited quantity every month. To ensure that this won’t leave your legal practice overwhelmed or your clients shortchanged, the services under your subscription model can be relatively more straightforward. For instance, a subscription fee can include unlimited or regular calls with their attorney during working hours and days. This is valuable for many clients as they may prefer a more direct line for reviews or inquiries.

Another great service that you can offer as part of a subscription is help with legal documents. As we’ve previously discussed, legal documents are notoriously tricky, even for practitioners. This is why services like Definely’s unified legal documentation solution are becoming increasingly popular. Via AI techniques, it can make reviewing, editing, and drafting legal documents easier and faster, while still being accurate.

For subscription-based law firms, offering a similar service can help make documents more understandable and appealing for layman clients. By offering access to templates of legal documents, clients can take point on certain tasks with the security of knowing this was first helmed by a professional.

To add more premium value to this service, you can even apply legal design and visualization techniques. Using design tools like Canva, you can easily create clear, engaging, and attractive documents that your clients will appreciate.