A Legal Pricing Meditation
And Why We’re Launching a Subscription Staffing Model
“The More Constraints One Imposes, The More One Frees Oneself”
We’ve saved a major announcement for the P3 2019 Pricing Conference: We’re now offering a subscription staffing service. Law practices and legal service companies can now subscribe to our platform for low to no fee permanent hiring and dramatically reduced payrolling fees for flexible hires. You can read more about the “how” here, we’d like to devote this to the “why”.
We can’t discuss the “why” without discussing the importance of pricing. Pricing doesn’t sound glamorous—and it doesn’t get the hands-a-waving of the aspirational legal tech fan kids (many of whom seem to have never practiced law or been involved in the realities of practice management) like “AI”, “Machine learning”, “Big Data”, and “Blockchain”.
In our 8+ years of selling into law firms at Hire an Esquire, we have seen pricing demands drive innovation and the adoption of new models and technology more than any other single factor (as well as every other factor combined). If not for pricing pressure, clients would have never given tech and price forward alternative legal service concepts and small law firms a chance; Biglaw would never be forced to adopt process and technology innovation to compete. Hire an Esquire wouldn’t have been able to challenge the brick and mortar agency model. When we first began, law firms didn’t care that we were more efficient and accurate, but their clients and their budgets eventually did. The small firms that have been a key part of Hire an Esquire’s traction have been able to flex their muscles and grow rapidly (using Hire an Esquire and flexible staffing as an integral part of their growth plan) because of this cost-conscious environment. Many of these firms are led by former biglaw partners who defected to better respond to market demands.
In larger organizations and conservative industries like law, inertia is the biggest poison to innovation—and cost pressure is the antidote. Here’s why we’re excited about our new pricing model and why we think our users soon will be too:
Reason #1: Pricing Can Drive Good Behavior and Great Client Value
We’ve seen pricing drive good behavior and better outcomes and value for law firms and their clients. Our new pricing model is also meant to help our clients get the best results and pricing while encouraging behavior that is respectful of our candidates.
We’ve watched and learned from the successes and mistakes of pricing in the legal world. 54% of Alternative Fee Arrangements end up as or more profitable for law firms than traditional billing arrangements. From our conversations with countless general counsel and law firm partners (and being a part of their RFP and bid processes), these situations tend to be a win-win when the parties work collaboratively and transparently together, sharing data as well as the financial risk and upside. If law firms and legal service companies are researching, implementing and managing process and technology innovations, directly and/or with the help of curated, vetted vendors, clients are willing to pay for this expertise and management (just as they were for legal advice). Law firms and service companies can have higher profit margins on these solutions than on marking up (and often writing off) attorney hours. Both sides have expressed that when done well these collaborations strengthen business relationships and build loyalty in a ruthless legal procurement environment.
Like everything else, pricing tends to be disastrous when done thoughtlessly and sloppily. A top nightmare pricing scenario we hear from law firm management is a partner who doesn’t understand that pricing and lean law are a discipline growing in importance rather than a trendy marketing tool. The partner throws out an alternative fee arrangement proposition to a client without data (and the necessary homework) billing it as a business development expense. The project often becomes a money-loser and the firm less attentive to the client. The client walks away with poor work product and results. Many general counsels have expressed their suspicion of low bids for this very scenario.
We see many parallels to staffing. When done with collaboration, data (and basic human decency) it can be a great experience with great results for all involved. We’ve developed strong relationships with clients who see flexible staffing as a key part of the future of their business and give this growing discipline (and our network of legal professionals) the consideration, understanding, resources, and respect deserved. They understand and consider our fit scores and treat our candidates with dignity— providing feedback, offers and/or closure to applicants and candidates they have engaged in our network. They land the best candidates and have the happiest end clients; our legal professionals have a great experience and want to work with them again and again and often become permanent hires.
A challenge we face (often with larger law firm clients) is that they see specialized flexible staffing as a passing fad, treating it as an afterthought and inconvenience to their permanent hiring process. They don’t take the time to provide the details of the job and work environment or provide responses or feedback to our candidates that they engage. Instead, a scant job description is thrown to a high volume of vendors for a resume cattle-call, follow up questions are rarely answered. Terse e-mails ask further questions about candidates or request interviews—candidates (and our team) are often ghosted after further engagement and interviews. Not letting our applicants know the status of their candidacy or any feedback after they have taken the time to respond to additional requests and interview is dehumanizing and creates a bad experience and impression. If the client does reappear and wants to hire a candidate, the candidate is generally eager to choose another opportunity where they were treated respectfully.
Our Subscription pricing model rewards and encourages law practice clients who are more intentional and thoughtful about the channels they use and their candidate engagement process. When law practices are responsive to the candidates they engage and run their process with consideration and a little bit of discipline, they are more likely to sign the most coveted candidates who are often choosing between multiple offers. Also, as pricing becomes more competitive in volume staffing jobs like document review, a subscription allows us to continue to offer premier health benefits to those who work with us (and get the best talent!) while still offering significantly lower pricing than other vendors.
Reason #2: Our Technology Has Arrived
Tech products are rarely fully automated or delightful user experiences on day 1. Countless hours are spent figuring out what and how to automate a process to provide the best user experience, in the interim the many gaps are filled manually. We opted to stay purely transactional until we could ensure a product that provided a strong, consistent user experience.
Our team has had a front-row seat to the development of our product and the gradual transformation from many manual patches to allowing our clients to control their hiring process more effortlessly and accurately than via traditional recruiters. Here are the key milestones that we’ve achieved over 8 years, thousands of placements, and countless hours of testing, refining, and developing our product that make us confident that Hire an Esquire is subscription worthy and that a subscription model can provide more value to our clients than a transactional model:
78% Machine Placement Rate: These are placements where clients posting a job ultimately hire one of the candidates our machine instantly recommended.
71% Fulfillment Rate: 71% of jobs posted on our platform are filled by us!
Hiring Crystal Ball: The cost of a bad hire is daunting and we’ve heard from our clients that mitigating this risk and cost is pure gold. Our Moneyball assessments are a proven, research-backed crystal ball, predicting workplace performance and success.
Easily Digestible Snapshots of Hard & Soft Skills: Our Moneyball assessments includes an insant visual, easy to understand snapshot of how an applicant fits a job’s requirement and work environment. Information that usually take multple interviews and even months of working together to fully understand.
“Self-Serve” Permanent Placements: We now have clients regularly finding and making their own permanent hires with the help of our extensive candidate pool as well as our job posting form and the related recommendations and candidate fit scores. Low to no fee permanent hires are a key benefit of our subscription model and our clients tell us our platform is much more on point (and now can be more cost-effective) than LinkedIn Recruiter for finding permanent candidates.
2% (and Growing) of Active US Attorney Population Across the Country: This has helped with our high fulfillment rate and making sure our law practice clients can instantly connect with the candidate they need.
Want to read more about our subscription pricing or discuss with further?
We look forward to continuing to find new and better ways to work with you!