5 Pricing Strategies for Law Firms to Convert Prospects to Clients

Many law firms spend tremendous amounts of money to attract prospective clients but fail to seal enough deals to remain profitable. Getting people to send messages or call is one thing. But converting those prospects into paying clients can be an entirely different battle. 

You can do everything right in terms of having an attractive brand and message, but it only takes one thing to send a potential customer elsewhere. Often, that thing is your price. If your legal fees give people sticker shock or aren’t presented properly, your conversion rates will suffer. 

Here’s why your firm’s legal fees are so important to clients and five pricing strategies your firm can use to convert prospects to clients. 

More Than Half of Legal Consumers Want Pricing Information

Economic uncertainty remains a prevalent news cycle topic, so it’s not surprising that legal consumers are price-sensitive. In Martindale Avvo’s survey, “Understanding the Legal Consumer 2023,” more than half of respondents (56.8%) want information on pricing or fees when looking for an attorney. 

When asked what the biggest deterrents to hiring an attorney for a legal matter were, the number one response (46.6%) was that the services were “too expensive.” Among the respondents who decided not to hire an attorney, 38.8% made the decision based on fees. 

Balancing Firm Profitability With An Effective Pricing Strategy

While cost is a critical consideration for prospective clients, you still have to run your law firm like a business. This means you need to pay your bills, pay yourself, keep up with inflation, and generate enough revenue to fuel business growth. This must all be done while you remain competitive in terms of the fees you charge and the services you offer. 

When it comes to balancing profit margins with competitive pricing, law firms must understand their market and offer a unique value for their product or service. First, you must have some idea of what the typical rate for services is in your market to use as a baseline. Next, you can highlight your firm’s differentiators to justify any rates higher than the norm. 

The ideal time to let potential clients know how your firm is different is in the initial stages of the buyer’s journey. For example, you can provide information to website visitors via 24/7 live chat through a service like Ngage or your legal intake solution. 

5 Pricing Strategies for Law Firms to Boost Conversions

The right law firm pricing approach means you’ll get more clients, and your firm will be more profitable. That sounds simple enough, but how do you achieve it? Here are five pricing strategies that can help you boost your law firm’s conversions. 

1. Offer a Free Consultation

Lawyers have a reputation for being expensive. When people determine they need legal assistance, they’re probably thinking about money. While you aren’t required to offer a free consultation, it’s something roughly half of legal consumers look for when shopping for a lawyer. 

As you’re undoubtedly aware, the legal industry is incredibly competitive. Offering to meet with a prospective client to review their situation for free can set you apart from your competitors. This short meeting can also give clients a chance to make a valuable connection with your law firm, which can lead to additional conversions. 

2. Choose the Proper Legal Pricing Model

Rule 1.5 of the ABA Model Rules of Professional Conduct states that a lawyer may not collect an “unreasonable fee.” As long as it’s not excessive, you can choose any pricing model you wish. You’ll generally find three fundamental pricing models in the legal industry:

• Cost/profit model: Firms set their pricing to recover costs plus an additional percentage for profit. 
• Competitive model: Firms set their pricing based on their primary competitors’ estimated or known pricing. 
• Value model: Firms tie their pricing more closely to the value they are providing the client. 

Traditionally, law firms have relied on the competitive or profit models. However, more appear to be focusing on the value they provide to clients. If you choose this method, think about the scope of services you offer and the value in terms of service, such as 24/7 availability. 

3. Structure Your Fees

No matter what pricing model you choose, your law firm will have to structure its fees in an easily understandable manner for the average client. Here are some common options:

• Hourly pricing: The client is billed for the time the law firm spends working on the case. 
• Flat fees: The client pays a set fee for a legal service, usually one with a predictable workload and outcome. 
• Contingency: The law firm receives a percentage of the client’s payout, contingent on a favorable case outcome. 
• Retainer: The client pays a set amount into a trust account up front, and the law firm bills to that account. 
• Sliding scale: The client’s fee will adjust based on their income. 
• Subscription pricing: The client pays a set fee and receives access to legal services on an as-needed basis. 

4. Provide a Cost Estimate

At the first meeting, you can put your prospective client’s mind at ease by giving them your best estimate of how much the case will cost. Depending on the nature of the legal matter, this might be challenging. 

For example, you might need to provide a range for something like a criminal defense or contested divorce case, where matters could be resolved quickly or be drawn out for months. An estimate should be simple enough, however, with something like an estate planning or real estate law matter.

5. Be Completely Transparent

Most legal consumers are new to the idea of partnering with a law firm to resolve a legal issue. Because of this, there may understandably be some apprehension about what lies ahead. 

This presents your firm with an opportunity to build additional trust by educating your prospective client about your procedures, fees, and cost policies. By doing so, you’ll be viewed as a credible and trustworthy resource, which can increase your conversions.  

When someone doesn’t retain your law firm, it generally means they are moving on to a competitor. The last thing you want is to waste marketing dollars getting people to your doorstep only to lose business over pricing. Having the right pricing model for your market and strategies in place can help you convert more leads and improve your firm’s profitability.