So what can lawyers do to make procurement of legal services more palatable for clients in lean times? For starters, they can take a lesson from some of the initiatives that retailers are adopting to retain customers and stimulate sales in the holiday season. I've listed some of these measures below, and I'll leave it to you to determine whether these ideas can work for your practice:
1. Show Clients Your Budget Options
Not surprisingly, upscale grocery store Whole Foods (dubbed Whole Paycheck by some) is suffering in this economy. Sure, folks always need to eat, but when you're unemployed, the first items cut from the grocery list are discretionary luxuries like imported cheeses or handmade pastas. So rather than risk losing to pedestrian grocery stores those customers who once willingly shelled mega-bucks for these kinds of goodies, Whole Foods has shifted its marketing to highlight its best values for customers, reports the Washington Post. Now, Whole Food gives "Value Tours" of its stores to teach customers about saving by buying in bulk and dispenses tips on finding bargains on its blog. And for the holidays, the store is promoting a list of environmentally-friendly gifts that cost less than $20. Though teaching customers to cut costs may result in less profit for Whole Foods, in the long run, the strategy allows the store to retain customers who will merrily resume more lavish spending when the economy turns around.
Lawyers can implement a Whole Foods-like strategy by identifying ways for clients to keep their legal fees low. Perhaps a client can't afford your deluxe estate planning package right now, but can pay for the bare essentials. When the economy improves, the client might decide to pay for an upgrade. For some cases, clients can save money by doing some of the legwork themselves. You might, for example, tell corporate clients that you can draft their incorporation papers but let them take care of the filing on their own to save extra fees.
Or instead of charging clients each time they call for a status update, you could implement a secure online portal or project management tool (such as Basecamp or Zoho) where clients can check on the progress of their case themselves or download documents rather than calling you.
2. Layaway Plans
This holiday season, retailers are increasingly reviving an old payment strategy, according to istock Analyst: the layaway plan. Under a typical layaway plan, customers select the item they want to purchase, which the store sets aside or "lays away." Every week or two weeks, the customer makes an installment payment for the item -- for example, in the case of Boscov's Department store, a customer must pay either 10 percent or $5 every two weeks until the merchandise is paid off, at which point it is released to the customer. There is no charge for the Boscov layway program, though there is a $5 cancellation fee if the customer decides midway not to make the purchase. Since many customers cannot qualify for credit cards, or prefer to reserve credit cards for emergencies only, layaway plans allow customers to budget and pre-pay for items that they could not otherwise afford.
Even if you don't adopt a fully pre-paid plan, you can also accommodate clients by allowing installment payments or spreading out retainer payments, as I described here earlier. Though some argue that accommodating clients with flexible payment plans minimizes the value of legal services or is tantamount to negotiating a fee with clients, clients will ultimately appreciate flexibility in tough times.
3. Bring Out the Bargains
With holidays around the corner, many retailers are offering major bargains, reports Business Week. Apparently, deals of half-off and more are flourishing in many industries, particularly in apparel and electronics.
Of course, slashing costs like Crazy Eddy (whose prices were IN-SA-A-A-A-A-ANE!) isn't necessarily a wise idea when applied to legal services as opposed to products. If you cut your rates to $100/hr, you'll have a hard time raising them back up to market when the economy turns around. At the same time, there may be ways to offer bargains that may serve as a loss leader in the short term, but can help build your customer base longer term.
Consider the Free Trademarks for Start Ups program that's being offered by attorney Erik Heels of the Clock Tower Law Group. Basically, if you're an already incorporated start-up, Heels will file your first trademark for free. Heels is also up front about his motives:
Are there one-time services that you could offer at no cost (and limited malpractice liability)? What about a very basic will, or a straightforward LLC formation? Even if the clients whom you service do not hire you, they may keep you in mind to refer to colleagues or friends.
Why I am doing this? Based on a survey that my firm conducted, each company has, on average, four unregistered trademarks. So I'm counting on your future business, as well as your referrals. I'm being straight with you. I'll trust you to be fair with us.
Most lawyers make the mistake of thinking short term. They worry that by cutting fees today, they will limit opportunities tomorrow. By contrast, retailers realize that taking a hit in the short run buys something more important down the road -- goodwill. And if lawyers can generate good will by helping clients save a few hundred dollars on legal services when times are tight, then they'll receive as much of a bargain as they give to their clients.