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Pricing and the value of legal services

 

jeremy-rachlin-revOver the weekend, I received my daily LivingSocial email blast of promotions for goods and services available in my area. One in particular caught my eye: Solo Will Package with Will, Living Will, and Power of Attorney for One Person. For the low, low price of $29.99. Married? You can add your spouse and make it a package of two “will packages” for only $39.99.

To say this grabbed my attention would be an understatement. A major part of my firm’s practice is estate planning. Needless to say, these flat fees are substantially lower than our flat fees.

I posted the link on the Maryland Lawyers community Facebook page and there was an interesting array of responses. There were a few war stories of DIY clients who had gotten themselves into trouble with self-crafted premarital agreements and other documents gone wrong. But the chain of comments soon turned into a discussion that I think it is important for attorneys to consider as we price our legal services.

In an increasingly crowded marketplace where we are now competing against not only other lawyers but DIY legal software, how do we impress upon clients the value of paying significantly more for the services of a lawyer?

Each lawyer will approach this differently; I don’t believe selling fear to be the best approach. I would prefer not to impress upon clients the value of my legal services by plying them with stories of what will go wrong if they try to do it themselves. In fact, I do believe that there are some very, very simple legal issues for which DIY legal software may be appropriate. For example, the sole-member limited liability company which simply requires boilerplate Articles of Organization and a most basic Operating Agreement to keep full and complete books and records may be adequately protected by DIY legal software.  

However, for most other transactional work, including estate planning, domestic agreements and other types of contracts, I find it hard to conceive of a situation where DIY legal software does not expose the client to higher legal fees down the road to solve new problems compared to if they had invested in a lawyer to craft these documents properly from the outset.  

It comes down to messaging, communication, and education. I believe it also comes down to acknowledging both the allure of the DIY software pricing model and that working with an attorney will be more expensive.  

But – to use estate planning as an example – I also believe that once the client is fully educated on the entire scope of the estate planning process and understands there is more to estate planning than just drafting a document and executing it properly, the client will immediately appreciate the value of attorney services.

Every estate planning client presents a slightly different scenario. Some come from blended families, others have different kinds of asset composition (e.g., annuities, individual retirement accounts, pensions, real property ownership, brokerage accounts). Estate planning includes not just drafting a will and seeing to its proper execution, but includes educating the client about beneficiary designations, asset titling (or re-titling) and the probate process.  

Simply put, there is no one-size-fits-all prenuptial agreement or estate plan. But that is largely what DIY legal software delivers. While the cut-rate, flat-fee pricing will entice even sophisticated clients, I believe communication and education (without fear-mongering and war stories) can make it immediately clear that to be pennywise is to be pound foolish when it comes to most legal services.

Finally, I hope to see many of you at the MSBA Conference next week in Ocean City! The Daily Record and the Young Lawyers Section will be sponsoring the annual kickoff happy hour at Liquid Assets on 94th Street on June 14 from 4 p.m. to 6 TDR also is sponsoring the annual Young Lawyer’s Sun Run (5K or 10K) June 16 at 7:30 a.m. If you see me, please take the opportunity in person to confront me on every one of my posts you vehemently take issue with. Or at least say hello.  

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