Like many lawyers who have worked under billable hours or fixed fees, for most of my career I have pondered the question: “How can I make money while I’m asleep?”, or better yet, awake but not working!
Early in my career I thought I had the answer – subscription-based pricing.
At the time I was working with Linklaters on their Blue Flag program (see this article for an overview of what Blue Flag was all about) which essentially provided compliance related information to subscribers who paid a monthly fee. This was then extended to basic loan documentation that was created using automated software (an early version of HotDocs if I am not mistaken).
As I was to find out though, the problem with this business model is that there is always someone willing to undercut you on price, with little attention to the value you were providing.
And so I never really took it much further.
But I remained interested in the dilemma of how I, as a knowledge provider working on hourly or fixed fee arrangements, could make money while I slept (outside of writing a book and get loads of royalties).
A couple of things recently changed my view on this whole issue though.
First, I listened to Episode #217 of Ed Kless and Ron Baker’s the soulofenterprise.com podcast in which they discuss ‘The Automatic Customer: Creating a Subscription Business in Any Industry’ a book by John Warrillow.
Ed and Ron continue this discussion in Episode #221 (Part II).
One of the big take-outs for me from the podcast was the fact that Porsche has introduced subscription pricing (see here for a story on this).
That’s worth repeating – you can subscribe to drive a Porsche!
And get this, Klaus Zellmer, CEO of Porsche North America, says of subscription-based pricing that:
“We engage people with a brand that they usually wouldn’t,”
As a law firm, imagine…
Second, I recently read that ‘Apple will lean more on subscriptions as iPhone sales drop’
That’s right, Apple – as of the date of writing this post – the world’s second biggest business by stock market value is moving towards a subscription-based business.
Which made me think – what’s the biggest doing?
Answer: ever heard of Amazon prime?
So if subscription-based pricing works for these big players, why not your law firm?
As always though, would be interested in your thoughts, views, feedback.