Law Practice Management & Technology

Subscription Legal Plans and Why Your Law Firm Needs One

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By Allen Rodriguez

Subscription legal plans represent one of the greatest opportunities for growth for law firms.  For those that aren’t yet familiar with legal plans, let me first start with a little history.

Origin of Subscription Legal Plans

Legal access and legal insurance plans are not a new concept, having been around since at least the ’70s. They were originally pioneered by Harland Stonecipher, an insurance salesman who, after suffering through his own legal troubles, was inspired to create a legal insurance product to help consumers.

Most legal plans are designed to meet the needs of the 70 to 80 percent of Americans that forego legal assistance because of costs. The promise of low-cost legal services makes a lot of sense, especially considering that the Legal Services Corporation estimates that 63.4 million Americans would qualify for legal aid funded services. Even with numbers like those, adoption of many plans has not achieved the subscription numbers we all know that legal plans are capable of reaching. However, I think that we are at a point in time where all of that is about to change. The key reasons for that change will be driven by changes in consumer behavior and the creation of newer, significantly more niche legal plans that are now becoming available to consumers and small and micro businesses (SMB).

The Netflix Model (Collaborative Consumption)

There was a time in the past where being signed up for a subscription was not desirable but today it is commonplace to pay subscription fees for services, such as access to a gym, your cell phone, internet and even your food.  This is mostly because technology in the last decade has allowed the creation of services/business models that can quickly distribute shared goods and services to communities of users.

Netflix is a good example of what I mean.  By offering their entire library of movies for a low flat fee every month, they were essentially saying to users, “you can all own the largest library of movies online collectively through your monthly contribution that provides you access.” In other words, we can collectively contribute small amounts to a system that uses the money to continue to build a library of movies that we (a group of like-minded users) can all enjoy. We collectively consume the product, and because we do, costs are low while benefits and features are high. Netflix changed the supply and demand economics of movie consumption under this model by increasing the convenience of the user, lowering the cost and creating an effective distribution system.

Today  many major disruptive business models such as Uber, Google Apps for Business and just about any other software platforms use this model, and we consume these goods and services happily. This change in consumer behavior is great for law form legal plans. That sounds reasonable, but what is the business case for a law firm subscription legal plan?

Subscription Legal Plan Opportunities

The Legal Services Corporation (LSC) estimates that millions of Americans go without basic legal services annually. Subscription Legal Plans help solve this access problem by reducing the barrier of entry to high-quality legal services – many subscription fees for legal services range from $14 a month on up to $500 depending on scope – while creating recurring revenue opportunities that scale for the law firm. In fact, according to a post in Stanford Business most business in the future will be subscription based.

To get a sense for the size of the market, we can look to a fairly recent estimation by Magnify Money. They reported in October 2019 that approximately 36 million households in the U.S. have less than $1000 in savings. Job losses due to Covid-19 only contribute to the problem. The Federal Reserve’s Survey on Economic Well Being (Table 32) reports that, as of April 2020, 68% of employed Americans expected to pay for a $400 emergency using savings or credit cards but the number dropped to 46% with those who had suffered job losses or pay reduction. The unexpected need for legal services and the cost of an average retainer is likely to exceed what Americans can afford and therefore they go without legal services every year. Paying for services in smaller incremental amounts allows one to be more proactive in avoiding legal issues and offers legal protection for the most vulnerable in our society.

Providing this untapped market with high-quality legal services is one way to solve the access to justice problem and earn a great living, too. Why?  Because recurring revenue, coupled with the use of technology to better serve your clients, is a much more scalable system than the current law firm business model. In fact, a modest legal plan with a cost of $29/mo that can get to an acquisition rate of 50 subscribers per month can see exponential growth in terms of revenue.  Even when you consider attrition/churn rates, a plan like that can get to about $15K a month in pretty short order.  Our own data shows that utilization rates tend to hover around 25 to 30 percent, and most of our plans include software-provided services, such as a content library or document downloads, so the model is scalable.  One  attorney who is proficient at handing advice calls can manage thousands of subscribers.

Newer Niche Legal Plans

Until now, most legal plans tried to take on as many users as possible. Some plans – LegalShield, Hyatt and ARAG, for instance – would create benefits strategies targeted at large segments of the population. While this model has worked well for them, gaining high adoption under these models typically involves significant marketing costs as they try to reach all consumers for all legal issues. Just as technology companies are creating more and more niche solutions for particular problems in certain industry verticals, legal plans that follow this trend will also have greater chances of achieving low-cost adoption by their intended audience.

Even while the overall legal benefits for these targeted groups of users may be similar to those offered by mainstream plans, the messaging and understanding of a particular problem for the niche plan users make it unique enough for the end consumer to feel confident that the niche plan was specifically designed for them. This helps accomplish two things for the law firm provider:

  1. Easier plan adoption at lower marketing expense
  2. In the long term, lower attrition because of the personalized and emotional connection a user has with the product

It accomplishes this because the niche legal plan is able to create and target its messaging more specifically and create unique and engaging experiences for its users. Furthermore, there is this “the law firm gets me” type of experience because the lawyer servicing the plan can use the communities particular vernacular and relevant analogies.

What Law Firms Are Taking Advantage of This?

We have seen significant increases in demand for legal plans at ONE400. Here are two examples  that target a specific niche of the total legal plan market: was started by Arizona HOA lawyer Clint Goodman. Clint decided pretty early on that he wanted to be the best and most innovative lawyer servicing homeowners associations (HOA’s). That business is largely a transactional one (e.g., demand letters, resolving board disputes, etc.). However, because of the frequency of common legal needs within that category, it is one that was also a great model for building a subscription offering. With a bit of collaboration, we were able to create a set of features and benefits that would benefit his clients, lower their costs and reduce the amount of manual process on his end by leveraging automation and other technology for servicing his subscribers. He now offers a monthly subscription service and client portal on his website where his customers can take advantage of many of the services they need frequently.

The Creators Legal Plan
The Creators Legal Plan is the brainchild of Jonathan Tobin, an attorney, designer, coder and musician whose practice serves mostly creative freelancers, agencies and tech startups. He offers a suite of services that are particularly important to creative professionals, mostly intellectual property issues. Because he understands this population of consumers, he is able to target them with benefits like trademark, licensing and copyright issues that are highly relevant to his end user. His attrition is very low, and his platform is gaining traction daily.

Once a plan has strong adoption and has gained market share in its given niche, it can always be expanded to offer additional services to reach a different segment (think Uber Black going after high-end business travelers as opposed to merely solving the last mile problem).

The Future of Legal Plans

 Now that consumers are more comfortable than ever receiving services under a subscription model, legal plans are poised to gain strong momentum. However, it is the niche legal plans that will be the real winners in all of this because they will be creating specific solutions based benefits that will resonate well with their target markets. In today’s “there’s an app for that” consumer mindset, consumers will look for very specific (niche) solutions to their legal issues, and that will be the primary drive for low-cost adoption and longevity in these plans. I predict going forward, we will see many more niche legal plans being developed by law firms to help steadily increase revenue and stabilize cash flow.

About the author

Allen Rodriquez is an investor, startup advisor and legal product development strategist who has been serving the legal industry for over 21 years.  He is founder and CEO of ONE400, a law firm marketing & law innovation agency headquartered in Los Angeles and New York.

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