Subscriptions are a novel idea for the legal industry, with its very traditional hourly billing model. But subscriptions are slowly gaining popularity with transactional law firms, and for good reason. Unlike hourly billing, which leads to unpredictable costs for clients and creates unnecessary friction in the relationship, subscription billing provides predictability. Clients know exactly how to budget their legal expenses, and law firms have a more stable workload and a recurring revenue stream. In this post, we’ll walk through how The Food Law Firm implemented a subscription billing model, how it has impacted the firm and its clients, and how they use software to streamline processes and maximize profitability.
Background on The Food Law Firm
The Food Law Firm was started by Jason Foscolo, who currently serves as its Principal and sole managing partner. Jason originally graduated law school in 2002 and then served in the Marine Corps until 2010, where he attained the rank of Captain.
He had always been passionate about the food business, so he went back to school to pursue his LLM with an emphasis on food and agriculture. After finishing his degree, he went straight into solo practice, forming Jason Foscolo, PLLC in 2011.
Early on, as many solo attorneys have found out, building his practice was not exactly easy. He took on any client he could and dealt with a wide variety of legal issues.
He billed clients on an hourly or per-project basis, but he often struggled to keep these clients around long term. This meant that he found himself in an unpredictable cycle where some months would be busy and stressful, and others would be slow.
It took Jason about six years until he felt he hit his stride, and at that point his practice started humming like a well oiled machine. What made the difference? Well, it was a combination of two key changes he made which solved many of the major challenges he was facing.
Focusing on a Niche
The first change Jason made was that he narrowed his focus. Rather than taking on any transactional legal matter like he did in the early days, Jason became “The Food Law Firm” and focused his services only on farmers, food manufacturers, and other food related businesses.
It may seem counterintuitive that taking on less types of clients can help a law firm grow, but this is often exactly how it works. When you position yourself as just a regular old law firm, your branding and messaging won’t really resonate with anybody. You don’t stand out from the crowd.
When you focus on a niche, you can create unique marketing messages that will speak directly to your target clients (check out Jason’s website for an example). Getting your message across in a compelling way is the name of the game in law firm marketing.
By limiting his practice to business and commercial legal services for companies in the food industry, Jason turned The Food Law Firm into the go-to legal service provider for those types of clients. After all, if you were a food company, why would you go to “Johnson, Jones, and Smith” when you can go to THE Food Law Firm?
Making the Switch to Subscription Billing
“When it comes to finding success in business, you’ve got to be willing to throw every preconceived notion you may have out the window.“
The other, more significant change Jason made to his practice was transitioning to a subscription billing model. For The Food Law Firm, this solved two very big challenges:
- Clients needed legal help on an ongoing basis, but they weren’t getting it due to costs and friction
- Jason needed a more predictable work schedule and stable income stream
As a food business, everything you do comes with risks and a plethora of regulations to abide by. Jason knew this was the case, but his clients didn’t always acknowledge it. Instead, they’d work with him on a single project, and then move forward with business as usual.
Jason didn’t particularly like the idea of having to check in with clients every few months to “upsell” them on more services. But meanwhile, he knew his clients were foregoing legal services they needed, either because they failed to see the risks or didn’t want to incur the expenses.
For Jason, subscription billing fixed both problems and was one of the biggest keys to the success of his practice. While some lawyers think subscription billing is crazy, as Jason explains, “When it comes to finding success in business, you’ve got to be willing to throw every preconceived notion you may have out the window.”
How Subscription Billing Solves Problems for Clients
With subscription billing, Jason’s clients now have the ability to receive up to a certain number of hours of legal work each month for a one-time monthly fee. The subscription fee is paid automatically, regardless of whether the client uses all of the allotted hours or not, and the hours do not carry over.
Jason requires a three month minimum subscription commitment and has three different pricing tiers that provide two, four, or eight hours of billable work. This provides flexibility for clients, which have varying needs depending on the size of the company and complexity of its legal issues.
When a new client signs up with The Food Law Firm, Jason provides a free legal assessment to advise companies what legal risks might be forthcoming, and how they should plan to address them. All subscription plans also allow for unlimited legal advice via emails, texts, or phone calls.
The unlimited advice is perhaps the most appealing part of the offering for his clients because it significantly improves communication and eliminates friction in the relationship. Jason maintains an open dialogue with each client to ensure that the company is heeding all possible risks and taking measures to avoid them.
Clients never have to worry about being billed for these communications, which incentivizes them to stick around long term and make sure their legal needs are being handled properly.
How Subscription Billing Helps the Food Law Firm
By starting off every billing period with a legal assessment that provides the company with a clear understanding of its upcoming legal needs for the next few months, The Food Law Firm is able to establish long-term working relationships with its clients.
This means less effort is spent on marketing and business development to bring in new clients, and more time is spent working with existing clients and providing value. Not only that, but it also allows Jason to accurately forecast and plan out his workload because he knows exactly how many hours each client has utilized, and how many are remaining in any given month.
This predictable workload gives Jason peace of mind. He has completely freed himself from the pressure to always be billing clients. If all of his clients have already utilized their allotted hours in a given month, Jason can go home early and spend time with his family without feeling guilty.
Best of all, The Food Law Firm has a recurring, predictable revenue stream. No matter how many hours he works, he earns the same amount of money and he doesn’t have to deal with the headaches of up and down months with unpredictable cash flow.
Maximizing Profitability with Technology
One of the biggest problems with hourly billing is that it actually rewards law firms for working inefficiently. This creates a nightmare situation for clients where the work both takes longer and costs more than they would have anticipated. In this scenario, it’s not really surprising why they end up foregoing legal services in the future.
But with subscription billing, your revenue is no longer tied directly to your time, which means there is a strong incentive to operate as efficiently as possible. Realizing this fact, Jason decided to make use of technology extensively in his practice. After all, technology is one of the biggest drivers of law firm efficiency.
Lexicata for Seamless Intake and Communication
The Food Law Firm uses Lexicata’s online intake forms, e-signature integration, and email templates to save time and deliver a seamless experience for clients. Jason describes it as a “slick client interface” and mentioned how his clients really appreciate the fact that his firm makes it incredibly easy to work with him.
Jason has developed a robust library of online questionnaires tailored to specific types of legal services that he offers. His clients are able to provide all the necessary details about their matters through these questionnaires, and also e-sign any required legal forms and documents.
Lexicata helps The Food Law Firm deliver the highest possible client satisfaction, and also saves them a ton of time by eliminating data entry and reducing the time it takes for clients to return paperwork. Clients can even submit things from their smartphones, which is really nice in the food business, where people are not typically sitting around at desks all day.
Clio for File Management and Billing
The Food Law Firm also utilizes Clio for time keeping, payments, storing files, and tracking other information about the clients’ legal matters.
Clio’s time keeping features ensure that each client’s monthly quota of billable hours is not exceeded, and provides a neatly organized database for all of the firm’s data and files, which are accessible from anywhere.
The integration between Lexicata and Clio allows for a seamless transition of data between the two systems which makes it easy and efficient to use them together.
While subscription billing may seem like a crazy idea for a law firm, Jason Foscolo has found a great deal of success with it. Not only does it provide predictable expenses for his clients and a predictable workload and income stream for his law firm, he also believes it has made his services more valuable.
He encourages open communication with clients by offering unlimited calls, texts, and emails without the fear of being billed. This gives clients peace of mind and incentivizes the formation of long-term working relationships which benefit both parties.
Although it took The Food Law Firm about six years to hit its stride, Jason is now more confident than ever in the model he has developed, and he attributes much of his success to his keen focus on providing value and keeping his clients happy.
When asked about his number one piece of advice for attorneys starting their own practice, Jason simply says, “Figure out what the clients need, and make it easy for them to do business with you.”