Subscription Legal Services: Big Waste or Big Value?
Traditionally, lawyers have charged businesses by the hour for services. As I’ve spent time with entrepreneurs with startups, I find that these traditional fee arrangements don’t meet their needs that a subscription model does. Think about Amazon Prime, Netflix, Apple Music, and other subscription services which have become increasingly popular over the last decade. Then, think about subscription legal services.
A study by McKinsey & Co. revealed the subscription e-commerce market grew by more than 100% each year for the last five years. The legal industry is moving in the same direction. As we head into 2020, you can expect to see more availability and demand for subscription-based legal services. Keep reading to learn a little more about subscription legal services and why they are a startup necessity.
What Is a Lawyer by Subscription?
A lawyer by subscription is an alternative fee arrangement where a client pays a flat monthly or yearly fee for a certain set of legal services. This allows them the freedom to contact their attorney as needed during that time, instead of their attorney billing them by the hour. Sometimes these fee arrangements are also referred to as lawyer-on-retainer, outside counsel services, or toll bridge agreements. You likely have used subscription services for a gym membership or another membership type.
Subscription legal services work similarly. You might find some parameters on phone calls, documents, or specific topics, especially when using a legal service subscription. However, generally, once you pay your monthly or yearly fee, you have whatever access you need.
Subscription Legal Services; Benefits for Startups
If you are starting a new business, you can benefit from a lawyer by subscription in several ways, which include:
Reducing Economic Uncertainty
Traditional hourly billing is often not transparent. You aren’t quite sure what services are included in your bill and additional costs for documents, letters, or other services aren’t always clear. As a startup, who likely wants to grow and scale your business, you need as much economic certainty as possible as you raise capital and try to get your business to take off. When you pay monthly subscription fees for your legal services, you know exactly what you are paying, making it easier to budget all the expenses of running a new business.
More Easily Getting Your Needs Met
When you know exactly what you need and want, you might find some lawyers pushing things on you that they think you need. Lawyer by subscription services is more client-focused. You can expect your lawyer to focus on your specific needs, instead of offering the services they think you need. Many firms do not offer a specific subscription for startups and entrepreneurs, which includes helping clients establish their business (LLC, sole proprietorship, corporation, etc.) and helping them obtain their EIN number and learn about state filing regulations.
Avoiding Costly Mistakes
As you start your business, you might have considered avoiding legal fees altogether and going it alone. This might seem like cost savings, but in fact, it can hurt you more in the long run. Lawyer by subscription services allows you to get the guidance you need without breaking the bank. In most cases, you will find monthly or yearly fees affordable. When you choose to subscribe, you could potentially save yourself a lot of money in costly mistakes.
Is a Legal Subscription Service a Necessity?
For startups and businesses looking to have a fixed, transparent, and flexible cost for outside counsel services, a legal subscription services might in-fact be a necessity.