Finances for a Solo Attorney: Offering Unbundled Legal Services

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The finances of a solo attorney can be complex—and maintaining a steady cash flow can be public enemy number one for many solo attorneys.

One way to create steady cash flow is to offer unbundled legal services. Here’s what you need to know and why it can work.

Unbundled services are different from flat fees

An unbundled service is piece of pie, not the entire pie. Or in the case of the photo, it’s one whoopee pie, not a whole tray of them. For example, drafting an answer, discovery responses, or perhaps even negotiating a settlement. Many times, these services are offered on a flat-rate, but they do not have to be.

Handling a case on a flat fee to the point of trial is not an unbundled service. That’s full representation at a flat rate. Most unbundled services are completed in one meeting and do not take more than a couple of hours. If it involves much more than that, you need to rethink what you are “unbundling.”

What you should and should not unbundle

Unbundle things that you have done before and are easy to repeat. Forms are usually at the top of this list. Using an answer in the same practice area, discovery requests, or even discovery responses. Things that you have on hand and are relatively easy to modify to fit the specific case. Even certain tasks—like negotiating a settlement and finalizing a release—can be effectively unbundled if you have lots of experience handling that task.

You should not unbundle something you have never done before. That is a recipe for disaster. Even handling something that is similar can result in all sorts of unforeseen problems. I tried that once and it blew up in my face. And by that, I mean I ended up making $15 /hour on the matter. That is terrible effective rate.

Why unbundling is good for you and your practice

I offer unbundled services to consumers in cases where they have been sued on a debt. For many consumers, all they need is my assistance with part of their case—drafting an answer, responding to discovery, or negotiating a settlement.

These cases lend themselves well to unbundling. I’m able to help more consumers at a lower overall price and in many cases I am successfully leveraging my time. For most of the services, I have become extremely efficient at them, so I can do more in less time—which makes it affordable for the client. Because my involvement is limited, I can also handle more unbundled matters versus taking a case on full representation.

Clients are also very-savvy and will shop around for legal services. If you have effectively priced your unbundled services, it can be a good way to distinguish your firm from your competitors—and offer something that they do not.

Lastly, unbundled legal services can be great for cash flow. If you have a continent-fee heavy practice (like me), unbundled services are a great way to maintain cash flow. You can’t make a practice out of unbundled services, but you can certainly make it an important part of your practice.

Why unbundling is good your clients

Again, my practice area is well-suited for unbundling. My clients are being sued for a debt. With many debts, paying me to defend their case could end up costing more than the debt. Of course there are cases where it seem more appropriate—if they have a very strong defense and high success rate.

But many of the cases are not that clear cut and running up a litigation bill does not equate to success. Offering unbundled services allows me to assist clients on a cost-effective basis and ultimately, still save them some money in the long run. Clients can always can come back for another service if they need to, but they don’t have to, which means they can usually save themselves some money in legal fees.

Another nice side effect is that it allows your clients to become more involved in their case. For my clients, understanding and learning about the legal system is generally a positive. They feel more empowered by having more involvement in their case and many times develop more respect for both the process and attorneys (of course, this is not always true). I also hear back from a fair number of clients who were able to successfully resolve cases on their own—and they are understandably very happy about that.

Read your local rules of professional responsibility

In Minnesota we have very specific rules for unbundled legal services. For example, clearly defining the scope and price of your limited representation. There is a strong likelihood  that your state has similar requirements. Hopefully, like Minnesota, the requirements are straight forward and easy to incorporate into your retainer agreement.

If you are unsure about whether retainer passes muster, contact your local professional responsibility board. You should also look at your local P.R. rule on prejudice to clients—there are some situations where you may not be able to offer an unbundled service.

(photo:http://www.flickr.com/photos/djwtwo/4869953805/)

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  • How do you suggest advertising for unbundled services? It isn’t as though people are Googling for “unbundled legal services Minneapolis,” and it isn’t something that most clients would even think of. Do you bring it up to them and offer it as one possible way of engaging you/your services? Like a menu of options?

    • “IF” you’re going to advertise an unbundled service on Adwords, might I suggest that you focus on the specific service.

      For example, if your unbundled service is filling out form x, consider advertising that specifically.

    • I think advertising or marketing to clients about unbundled services is the easy part, and Gyi is exactly right. People naturally think in terms of a task to be done, like answering a summons or drafting a will. What’s hard is helping them understand that, even if you do this task for them, they probably aren’t finished. Because I used to work with Randall, I know that in addition to drafting an answer and helping the client get it in the mail, he will spend a lot of time explaining what is going to happen throughout the lawsuit and giving the client plenty of “if X happens, come see me again” cues.

      The hard part, in other words, is preventing the client from hurting himself when you won’t be there to help. That’s easy when you are handling the entire representation; it’s not so easy when you are just handling one piece.

      • Ding dong.

        That is why we don’t offer unbundled legal services.

        • Do you mean walk-ins?

        • I think (a) you can carefully select the services you will offer to minimize the chances that the client will shoot themselves in the foot, and (b) you sufficiently advise the client of the risks so that, if he or she does shoot themselves in the foot, they can’t don’t blame you for it.

          I offered unbundled services for five years with no complaints that I can recall, but lots of good results. I know Randall is still offering those unbundled services to the same sort of client with good results, as well.

          As everything, it’s a question of using good judgment, offering good advice, and keeping your client informed (within the scope of the representation, obviously).

          • shg

            I had a long discussion with Steph Kimbro about this a couple of years ago. I was deeply concerned about the ethical problems inherent in unbundled services. Steph had a lengthy explanation about the pitfalls and consequences in her retainer that was most impressive, but I doubted whether other unbundlers would put in the time and effort she did to fully explain the consequences.

            I remain impressed with Stephanie’s dedication to ethics. I remain doubtful that others will come anywhere near her.

  • In the past, I have advertised specific unbundled services on AdWords. I also have a “menu” on my firm’s website that lays out my various fees for various tasks. When I do an initial case evaluation, I also discuss the various fee options—and because of my client base, highlight the unbundled options.

    As Sam mentioned (and worthy of a follow-up post), the biggest downside to unbundled services is when the client ignores/forgets/disregards your advice and torpedoes their when you are not there. There are ways to minimize the chances of that happening, and I will address it in another post.