A 2016 study by LexisNexis, reviewed by Neil Rose in an article in the UK online publication Legal Futures, found that small firms (fewer than 20 fee-earners) that offered fixed-fee billing to clients were frequently ones that could be described as “entrepreneurial” for other reasons. In contrast to firms of comparable size they were, for example, “investing more in processes, technology and marketing,” Rose reported.
The study surveyed 112 lawyers and 108 clients.
“Most of those lawyers who saw the benefits of fixed fees viewed themselves as entrepreneurial,” Rose wrote. The study found that they “‘[tended] to be more progressive, open to change and customer-centric.’ These lawyers were also younger, from growing firms and their client conversion and retention rates were above or well above average.”
The impact on clients was an attractive benefit of the fixed-fee approach, the study found. “Importantly, we found fixed fees help to cement a better client relationship from the start by putting clients at ease,” Rose quoted the LexisNexis report as saying, “and [that] translates into more word-of-mouth referrals. According to our findings, clients who are serviced on a fixed-fee basis are more likely to refer the firm to others.”
Some creative approaches to the fixed-fee model were also reported, “such as offering a tiered (bronze, silver, gold) service, based on what clients want to pay for.”
Entitled The 2016 Mini-Bellwether Report: A Question of Value, the LexisNexis report will be of interest to managing partners who aspire to be more entrepreneurial and have indeed already engaged in fixed-fee approaches with firm clients.
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