As you know, I’m building Houchin & Associates around an integrated set of legal and marketing services. I believe it’s a unique model, which has benefits and challenges. Many of my clients are telling me they love the fact that I can (and will) give advise on both legal and marketing issues.
I want to take this to the next level. I want to come up with a pricing model that matches what I love doing (listening, identifying issues, coaching, and giving advice) with what clients seem to need most.
I want to provide so much value for the fee that it’s a no-brainer to choose this firm over “conventional” law or marketing firms.
Consider this post an invitation for feedback on some ideas. Feel free to tell me I’m crazy and that the conventional pricing models of legal and marketing services are the way they are simply because these pricing models have proven effective over decades of use. I’ll feel free to ignore that advice and try to shake things up anyway – you know me, it’s the kind of guy I am…
NOTE: I was getting a lot of “blog spam” in the commentary sections, so the best way to give feedback is to send me an EMAIL.
Here are two quotes from some great books to put us in the right frame of mind.
From “Inspire! What Great Leaders Do” by Lance Secretan:
We overuse the word “driven.” We want to be values-driven, customer-driven, mission-driven, market-driven, technology0driven, solutions-0driven, and self-driven. Perhaps this is why so many people are driven to drink, driven insane, or driven to distraction? Are Zen masters “driven”? Were Christ, Lao-Tzu, Confucius, Buddha, or Mother Teresa “driven”? Is being driven part of the problem rather than part of the solution? What would it look ilie if we were customer-inspired? Or market-inspired? Or values-inspired? Or family-inspired? Wouldn’t anyone rather be inspired than driven? There is a greater sacredness and inner beauty associated with inspiration, the breath of God, compared to the manic style of the old story leader that causes us to be driven – and thus drained.
From one of my all-time favorite business books: “The Trusted Adviser” by Maister, Green, and Galford:
More value is added through problem definition than through problem answer.
(I love that quote, and when you think about it, I think you’ll see it’s truth…)
This post is getting long, so I’ll try to cut to the chase now.
I’d like to offer clients a flat monthly fee that is simply for my advice and counsel. Of course I could go broke if this was defined as doing all the legal or marketing work. Therefore the challenge is to define both the price and what’s included in that retainer.
I don’t like tracking my time, but I have to – it’s something I can’t get away from. I don’t like putting a price on each hour or fraction, but again, that’s the reality.
I think the value of my advice is subjective to the client, not objective relative to time I’ve invested. For example, I could spend 3 hours working on a contract that is of relatively little importance to the client, yet say something in a 15 minute conversation that solves a huge problem or allows someone to sleep at night – that 15 minutes was just worth way more than the 3 hours of contract work.
One thing I would like to do is have people WANT to call me to talk about their issues, without thinking they are always “on the clock.”
Perhaps I can set a retainer at $______ which includes conversations and emails that (as stated in The Trusted Advisor) focus on issue DEFINITION and approaches to finding solutions. Then, if I need to engage in actually drafting the contract, filing the TM registration, engaging in litigation, etc we would move out of the retainer and into the flat fee or hourly models.
I just got off the phone with one of my favorite clients. She suggested that I offer three packages to clients:
Straight hourly work. (at a higher hourly rate…)
Project Flat Fee + Hourly
Retainer + Reduced Flat Fee + Reduced Hourly Rate
The challenge is setting the rates.
Right now, my hourly rate is $175 for consulting and $250 for litigation. Those rates are relatively low-mid for the area, but would be considered WAY low in Denver or in my areas of specialization, and they do not take into account my marketing/branding background and the value that creates in the discussion.
Perhaps my fee structure should look something like:
$250 for hourly work – consulting and litigation.
Project Flat Fees: For example, to file a TM application I charge $800/mark/class + an hourly rate ($175) for the inevitable office actions.
$1,000/month retainer for “business coaching” advice (legal and marketing/branding), and then $175/hour for actual work “solving” the problem – transactional work like drafting contracts or negotiating deals. Another way to think about this would be the retainer covering “counselor” time and the hourly rate covering “attorney” time.
Actual marketing/branding PROJECTS would be quoted conventionally as projects.
My thought is that the $1,000 MIGHT be capped at 6 hours of consultation time per month (or maybe it’s just “unlimited”). I’m doubting that my entrepreneurial clients will have the time to talk with me for more than 6 hours of “defining the problem” each month. There-in lies the risk… I would do the retainer on a month-to-month basis I think, that way if the value is not present for both the client and/or myself, neither is “trapped” in the relationship/contract for more than one month and can make adjustments accordingly.