Embrace Commoditization

bundled services - squareAt the end of last month, I was speaking to a group of estate planning lawyers in Denver about price transparency.  Price transparency exists in virtually all marketplaces for goods and services – it’s what allows consumer to compare prices and providers in just a few mouse clicks.

While the marketplace for non-elective healthcare is biggest exception to this rule, the legal marketplace runs a close second.  It’s shockingly hard to find price information.  Hourly rates, sure.  But that doesn’t offer much help.  An hourly rate doesn’t tell someone with a limited income, with a budget, what it’s actually going to cost to address a legal problem.  I’m talking about fixed prices, packaged legal services, things that are predictable and comparable.  That sort of offer is rarer than a blue moon when it comes to lawyers.

Why?  Because our industry is both incredibly conservative and shockingly risk-averse.  And it’s not doing consumers any favors.  My audience in Denver was aghast when I suggested that 60-70% of consumers don’t need anything more than simple estate planning assistance that attorneys could sell on a commodity basis.  That’s not what they see when people walk into the office – every situation is unique!  There’s no way a fixed price product would work.

And they’re right about the people who walk into their offices, because their clients are in the  minority of Americans who proactively get legal help with their estate planning needs.  This group is naturally going to skew heavily toward needing custom services.

But what of the majority who aren’t doing so?  Surely there is a massive untapped market among people who would like to have an estate plan but are turned off by the “black box” that they find whenever they try to figure out what this work is going to cost them.  Or they resort to filling out a form they find online, and pray that will suffice.

Fixed-Price Offers

Most lawyers are unwilling to address this market by offering a fixed price, well-defined product that addresses a basic legal concern (and I’m not just talking estate planning here; similar concepts exist in most practice areas).  They’re worried about clients who think the basic product will work but really need a more comprehensive, custom solution.  Or they’re concerned about needy clients who will require more time than they’ve paid for.  And so they persist with the same old high-priced, bespoke model of providing legal services.

That’s great work if you can get it.  But what of all those consumers who are going unserved?  Or those who are turning to super-basic online services?

It’s time to lose the lawyerly, risk-averse mindset and embrace the commoditization.  So what if some of the clients who are attracted to your fixed-price offer need more complicated services?  Every other business in the world calls that an “upsell.”  As long as you clearly disclose what’s in – and what isn’t in – your fixed price offer, you shouldn’t fear the upsell discussion.  In fact, you should regard the fixed price offer as a great lead generation source for your higher-end services.

And the risk that some clients will be more demanding?  So what?  Again, every business that sells on a fixed-price basis – from booksellers to barbers – knows that the cost of serving each customer is variable.  It’s basic, unquestioned, and accounted for by ensuring that the cost of serving all customers is more than covered by the aggregate price charged.  As long as that happens, it doesn’t matter if some clients take up more than their “fair share” of your time.

This isn’t rocket science.  But there’s a reason the legal needs of so many go unmet, and it’s only minimally explained by the fact that legal services are expensive.  Too much of it is due to unwillingness to take a chance, to pursue an opportunity rather than equivocate over risk, to offer a good-enough solution rather than only the whole, gold-plated enchilada.

Try it out – what’s the fixed price commodity service you could offer?  It doesn’t have to work for every potential client; just for a bunch of those who don’t currently realize that you can help them.