LexisNexis report finds lawyers see fixed fees as an opportunity, but most haven’t switched
The Mini-Bellwether Report: A Question of Value analyses the critical difference between ‘value’ and ‘price’ in legal services
LONDON, 10 October 2016 – LexisNexis UK (www.lexisnexis.co.uk), a leading provider of content and technology solutions, today launched The 2016 Mini-Bellwether Report: A Question of Value, which reveals that 43% of lawyers see fixed fees as an opportunity, ahead of mediation, globalisation, commoditisation and ABS; and yet only 23% of firms have actually made the change in the past year. The report suggests that this may be a question of mindset as lawyers don’t see themselves as ‘service providers’. 77% of lawyers admit that they don’t always appreciate that they are operating in a service industry.
Consequently, there is a marked difference in perception between lawyers and clients on what ‘value for money’ means. Lawyers mistakenly equate ‘value’ with ‘price’. 30% of lawyers believe they offer excellent value for money, but only 8% of clients agree. In recent years, lawyers have been under pressure to reduce fees, and having done so believe they are offering clients value for money. Conversely, clients feel those fees were too high to begin with, so, even with a reduction in fees, they still think they aren’t getting more than they’ve paid for. Nevertheless, fixed fees offer lawyers an opportunity to regain the trust of clients. 92% of clients on fixed fees ended up paying either roughly what they expected or less. By contrast, 63% of those on hourly fees paid more than expected.
Those lawyers who are taking the leap towards fixed fees are the most forward-looking. 76% of those who see fixed fees as an opportunity view themselves as entrepreneurial and tend to be more progressive, open to change and customer-centric. They are investing more in their processes, technology and marketing. And they are more likely to have non-fee earning business experts from outside the legal industry on staff. These lawyers are also younger, from growing firms and their client conversion and retention rates are above or well above average.
At the same time, customer service is of paramount importance. 88% of clients on fixed fees feel good customer service is ‘very important’ or a ‘top priority’ and this is even higher than those who aren’t on fixed fees. To this end, some smart lawyers are using fixed fees more creatively such as offering a tiered (bronze, silver, gold) service based on what clients want to pay for. In doing so, rather than offering a cut-rate service for a cut-price, they are giving clients transparency, choice and control.
“Lawyers have come a long way in recognising the business potential of fixed fees, but a more resolute change in mind set is needed to optimise this model,” commented Jon Whittle, Market Development Director at LexisNexis UK. “To deliver ‘value’, they must evaluate their service through clients’ eyes. As the research shows, the smart, entrepreneurial lawyers are already doing this – they are also more amenable to change and adopting processes, technology and marketing to make it happen. The rest must follow too if they are to be successful.”
This sub report entitled ‘A Question of Value’ is derived from The Bellwether 2016 Report: The Riddle of Perception, and looks at the critical difference between value and price as perceived by lawyers and clients. You can download the 2016 Mini-Bellwether report: A Question of Value at www.lexisnexis.co.uk/2016MiniBellwetherReport
This Bellwether 2016 report is the fourth in the series and explores the current and future state of the legal landscape from the different – and crucially differing – points of view of independent lawyers, midsize law firms, and sole practitioners. It examines their priorities, challenges, attitudes and appetite for change, uncovering some telling differences of opinion between lawyers and private clients. 122 independent lawyers and 108 clients were interviewed for this report. The full report is available here: www.lexisnexis.co.uk/bellwether-report.
About LexisNexis® Legal & Professional
LexisNexis Legal & Professional is a leading global provider of content and technology solutions that enable professionals in legal, corporate, tax, government, academic and non-profit organizations to make informed decisions and achieve better business outcomes. As a digital pioneer, the company was the first to bring legal and business information online with its Lexis® and Nexis® services. Today, LexisNexis Legal & Professional harnesses leading-edge technology and world-class content to help professionals work in faster, easier and more effective ways. Through close collaboration with its customers, the company ensures organizations can leverage its solutions to reduce risk, improve productivity, increase profitability and grow their business. LexisNexis Legal & Professional, which serves customers in more than 175 countries with 10,000 employees worldwide, is part of RELX Group, a world-leading provider of information and analytics for professional and business customers across industries.
About the Bellwether Report
The Bellwether Report series is an annual qualitative and quantitative research project, exploring the working lives of independent lawyers, small to midsize firms and sole practitioners. It aims to conduct a ‘temperature check’ into the changing landscape and showcase interesting themes, developments and trends.
About Business of Law
Set-up in early 2013, Business of Law is a LexisNexis-owned legal blog, created by experts, for experts, with the aim of uniting lawyers and business leaders to share knowledge about how to not just survive these more competitive times, but to thrive. Business of Law’s aim is to build the definitive resource for independent lawyers; an online destination that can help the sector to do business better. To access the blog, visit: http://businessoflaw.lexisnexis.co.uk/.
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