The pricing of family law services – An overview

Posted on: March 27, 2013

Last week, I presented a webinar for CLT on this subject. It was very well attended and there was some interesting discussion at the end. This built on the debate that had taken place on various LinkedIn discussion groups beforehand and as a result of the publicity surrounding the research I conducted in conjunction with www.onlydads.org and www.onlymums.org in advance. More information on the client research is shown here http://kimtasso1.wpengine.com/the-price-of-divorce-survey-results

Whilst it isn’t possible to cover all the points raised during the webinar, here are some of the highlights:

Pricing research

The participants were mostly from full service law firms where there were between one and five family partners. Of those who participated:

  • 44% said pricing was the responsibility of the head of the family department and 33% said that it was down to individual partners/lawyers
  • 63% used hourly rates and 37% used a mixture of hourly rates and fixed fees
  • 50% had done internal analysis of historic costs, 15% had researched client views on pricing and 20% had done no pricing research at all

Market developments

A review of developments in the market (e.g. www.quickie-divorce.comwww.managed-divorce.co.uk) showed that the advertised low prices effectively anchored the perceived price of divorce at the low end. We also looked at examples where a range of options for commodity services – with different fixed price points – were offered (e.g. Curwens and Co-Operative Legal Services).

Examples of small and medium firms bringing greater clarity, transparency and choice were also considered. Acknowledging the accepted wisdom of offering “free” services (the “freemium” model is prevalent in the Internet environment) and the growth of apps to provide advice and generate leads, we discussed the need to qualify potential clients.

I also pointed out micropayment models such as the brand new www.honestyBoxx.com widget which allows visitors to pay a small amount (according to their perceived value) for an answer to their question.

We also considered some of the strategies of firms at the top end of the market where differentiation and unique (non-law in some cases) packages of services were used for effective positioning.

Recent research on the cost of separation from the Legal Ombudsman – and the ensuing media coverage – was considered before we looked in detail at the client research mentioned above. Participants were urged to check out the excellent guidance on price communication issued by the Legal Ombudsman http://www.legalombudsman.org.uk/aboutus/publications.html.

Pricing basics

Some of the basic theories of pricing (e.g. Kotler) and value propositions were considered. Similar information is shown in this blog: http://kimtasso1.wpengine.com/the-pricing-and-value-of-legal-services

We also considered the other side of the equation – managing costs, efficiency and automation – by looking at systems provided by Epoq. http://kimtasso1.wpengine.com/just-about-everything-you-wanted-to-know-about-automated-legal-documents-but-were-afraid-to-ask It was noted that entry level systems start at £50 pcm per lawyer for family law.

Guidance

Towards the end, I offered my views on the state of pricing in the legal profession, explained seven general principles of pricing, considered how segmentation and different service/value propositions might be developed for the family market and talked through some aspects of my 12 step pricing model.

Such was the level of interest that I plan to produce a White Paper offering guidance in this area in due course.

PS I would like to thank Kerem Gokce, the technician at CLT, for remaining utterly calm when we were without a broadband connection for the 1.5 hours before the webinar. A true professional, I thank him for ensuring that absolutely “the show must go on”!

 

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One Comment on “The pricing of family law services – An overview

  1. Please note that Epoq are running free webinars on using document automation to support fixed price family services on 3rd and 9th of May 2013. Let me or them know if you want further details. Kim Tasso

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