Subscription Pricing
Subscription pricing describes a number of different arrangements where the common factor is a regular set payment for work within a defined scope. For example, a law practice may contract with a client that, in return for a flat monthly fee, the client can contact the lawyer for a specified number of advice consultations per month without additional charge.
‘Subscription pricing’ might also describe a flat pricing arrangement for services like bulk standard leasing or high volume, low value personal injury claims for an insurer. The services covered by the arrangement are generally defined and any work outside the scope is the subject of a separate agreement.
Frequently asked questions about Subscription Pricing
Subscription pricing is particularly useful for clients who need ongoing, small scale assistance with a variety of matters, for example small business owners.
No. While the Uniform Law does not specifically deal with the subscription pricing model, it is certainly permissible within its terms. You should ensure that the cost is fair and reasonable, the nature of the service is clear in scope and price, and that services are available in accordance with the representation made to the client.
Further, if there is no consumer harm, it would not be within the principles of our regulatory strategy to take any action against the lawyer.
Money paid for subscription services are not trust moneys. The moneys are not paid ‘on account of legal costs in advance of providing the services’, but are a fee for services that the client may or may not choose to use – they are more like a retainer or a reservation fee. In any case, there is no bill or separate charge for any service provided within scope, therefore no triggering event for the transfer of the moneys from trust to office. The fact that the client does not use the service in any particular month does not negate the arrangement – the client pays for the availability of the lawyer for advice, not the advice itself.
- Describe as clearly as possible what is, and what is not, within the scope of the service agreement.
- Keep appropriate file notes of conversations.
- If other parties are named when requesting the advice, a conflict check may need to be performed. The retainer should be limited to exclude a duty to disclose information in the possession of the firm insofar as it relates to other clients, subject to the existence of robust information barriers. Client data also needs to be properly safeguarded.
- The terms of the agreement and the price for the scope of services should be fair and reasonable in all the circumstances.
- The arrangement should be easy for the client to terminate, for example a month to month arrangement terminable at will.
Yes. A consumer can raise a consumer matter complaint within the meaning of s.269 of the Uniform Law. The right to do so should be set out in the service agreement.
(Information on the table is as follows: there are several advantages of Agreed Pricing and Subscription Pricing over hourly rate service arrangements. These include:
• Price certainty
• Shared risk
• Supports clear scoping and a project management approach
• Aligns client’s perception of value with price
• Builds agreed objectives and aligned expectations
• Supports automation and standardisation of repetitive tasks and information.
The super benefit of adopting either Agreed or Subscription pricing models is that they both support innovation and efficiency. While both support client’s choice in the scope of services, Agreed Pricing provides the client with more flexibility in their arrangement with the lawyer or law practice. These benefits may not apply to the hourly-rate model.
Adopting an hourly rate model, the law practice may not require training and adjustment of the business model, billable hours can be used as a primary performance measure, and time recording would be required. These, however, do not apply to Agreed Pricing and Subscription Pricing models.