Call it a new kind of legal limbo as law firms take a turn on the conga line to see just how low they can go. Only this form of limbo isn’t a game, but serious business. Large firms are quoting suicide rates to keep business reports Lawyerist while solos and nonlawyer networks are exploring cut prices potentially as a new business model.
Consider for example, Law99, a company that allows consumers to access legal services for $99 or less an hour, according to this press release. Attorneys register to use the platform for $99/month and receive clients whom they’ve agreed to represent for $99 an hour or less thereby avoiding any fee splitting issues. There’s not much detail at the site on how long the lawyer must commit to a $99/hour arrangement and whether the commitment to keep rates below $99 an hour constitutes a contract with the lawyer, client or both (for example, if the lawyer raises rates or decides to charge a contingency, could Law99.com sue for breach of the terms of service?) These are certainly issues I’d want to pin down before using the service.
In addition, I’d have some concerns about the types of lawyers signing up for Law99 and how that might impact myreputation. It’s not exactly promising that the founder is quoted in a press release as saying that lawyers will want to participate in Law99.com to supplement their current income or because they are broke and need clients. Not sure that I’d want to be seen online in the company of the destitute and desperate, even if I fell into that category myself.
Still, Law99.com is a far better option than costly pay per click sites or those that force lawyers to handle for a miserly flat fee. At $99/month, the cost to join Law99.com isn’t exorbitant (though it could still be better spent on personal networking or developing one’s own web presence) – and at $99/hour, lawyers won’t get rich but at least (in theory), they’ll be compensated for the time they put into the case. If you’re going to spend 40 hours on a DUI, you’re far better off being paid nearly $4000 than doing 40 hours of work for a flat fee of $1000.
But if you’re intrigued by discount rates, there’s no reason that you can’t simply offer them yourself, on your own terms. That’s the gamble that Lous Wierenga, a Palos Heights, Illinois is taking with his $100/hour offer to new clients for the first year with his firm. Starting clients off at a low rate can be tricky because they may grow accustomed to reduced fees – which is one of the problems when using a service like Groupon as I pointed out here. Still, if the lowered rates get clients in the door who can subsequently refer you to others, you could terminate the $100/hour rate service and just grandfather the earlier clients under that rate.
In many ways, I’m glad to see competition on rates because it expands access to law. No, lawyers won’t get rich on $100/hour — but they won’t starve either (particularly with the emergence of income-based loan repayment plans). Billing and collecting a modest 15-20 hours a week at $100 an hour amounts to $90,000/year and taking off $1200/month for expenses (say, $600 for loans and $600 for law firm expenses) comes to $76,000 which isn’t bad for honest work that doesn’t jeopardize your health, where you’re the boss and most of all, have an opportunity to do challenging work that every so often makes a difference.