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.