How do you price your legal products?

v4-Pricing-strategy-01Products substitute for services. The supply of lawyers is limited, so the margins on legal services are high. The delivery of legal services with software, which in its most standardized form is a legal product, does not have that limitation. For those law firms that have built products, one fundamental gating item is pricing.

Without a sensible pricing and branding strategy, law firms will either end up giving their tech away, or not competing with their products. If you give your tech away or don't price your products competitively, you won't have the revenue to continue investing in your software.

In this article, we’ll discuss the current pricing strategies and the way forward for law firms. If you want the executive summary, skip to the Conclusion.

Current pricing

Today there are pricing strategies for the business-to-consumer (B2C) space, vertically-integrated platforms like Thomson Reuters Practical Law, software used to market services, high-volume clients and the small but growing number of law firms that are actively seeking to sell their software at scale.

B2C pricing

Before PartnerVine launched, the price points for legal products were from B2C companies like LegalZoom and Rocket Lawyer. The B2C companies did not have to pay for a law firm’s expertise, professional requirements or liability, and as new entrants to the market they are in a position to cherry pick high-volume products (like wills and incorporation documents). The pricing in the B2C space has been based primarily on volume, and, although B2C offers should certainly be taken into account when setting a pricing strategy for a law firm, those price points don’t reflect the expertise, professional requirements or ability to syndicate risk that are the distinguishing factors of a law firm. Those factors are important reasons why a law firm’s pricing strategy should be different than that of a B2C legal tech company, and those factors should help establish a positive price/quality relationship between a law firm’s products and its services.

Vertically-integrated platformsv2-Law-Firm-Strategies-01

One of the greatest transfers of value from law firms to technology companies was the content law firms provided to Practical Law, which led to a successful exit for Practical Law shareholders when they sold their company to Thomson Reuters in 2013.  Today, vertically-integrated platforms are mainly subscription-based, and the increase in revenues of the top performers like Thomson Reuters Practical Law over the last ten years is a testament to the fact that they are growing at the expense of middle market work at law firms. Although Thomson Reuters Marketplace was launched with the expectation of including substantive law products from law firms, as of the date of this article, they have not yet done so, and they appear to be struggling with the business model (full disclosure: PartnerVine's law firm-friendly business model is in direct competition with TR Marketplace).

The subscription pricing of Thomson Reuters Practical Law as a vertically-integrated platform is a better benchmark for pricing for law firm products as the offer is clearly targeted to the B2B space. Unbundling subscription pricing for unit sales is something PartnerVine does on a regular basis.

Software used to market services

Law firms have given away software in the emerging companies space for many years. With the first comprehensive offers put together by Goodwin and Orrick and joined by many other firms (with peak investment probably reached with Cooley), the model is to maximize the funnel of potential clients to pick up services work. Some of those firms are extending the emerging companies model to other areas like data privacy. The difficulty for such a strategy is  that it does not lead to revenue that justifies on-going investment in products. It doesn't solve the Innovator’s Dilemma for law firms, but avoids it. 

For clients, it's important to note that this strategy is not free--it either results in lower profits for partners or higher prices for services. PartnerVine prices law firm products separate from services, and eliminates that mispricing. 

High volume clients

Sales of tech to high volume clients is a major business in the B2B space. In these circumstances, both the legal tech and the price points are custom, and the margins have been healthy. The key take home for firms that are building great businesses for high volume clients is not that software shouldn’t be sold at volume, but that the relative advantage of standardized and custom software needs to be clearly articulated. Corporate purchasers of custom software are not in the market for standardized software, and in my experience would not consider it. As a result, the markets are not incompatible, but are an important part of a law firm’s pricing strategy, with custom work at one end and standardized work at the other. Importantly though, a custom practice can’t compete in the long term with software that has more users and the virtuous circle of feedback and investment that creates.

One important upside for a law firm clearly pricing legal products is to provide a separate market for a law firm’s discussions with clients that is not in reference to the deep cost-cutting on services being pursued by major companies with automated rfps and reverse auctions. For large companies, legal spend is either now or will be transparent in fairly short order. With that transparency, a firm that competes on price for middle market work is increasingly rendered ineligible for more profitable top tier work. If you take that trend forward, there will be law firms doing bet-the-company work and law firms doing middle market work, and the firms doing middle market work will need to consolidate to reduce the depth of discounting. Selling products and services separately provides a separate frame of reference for clients in middle market work that does not disqualify a law firm from bet-the-company work. A further upside from the investment in tech is that it will make the law firm’s lawyers more productive and more valuable to clients and the firm.

Law firms selling software at scale

There is a small but growing group of law firms that are selling their software at scale. The offers slide down the price/volume scale, mainly depending on the cost of customer acquisition. PartnerVine sits at the volume end of the scale, with transparent pricing and a low cost of customer acquisition. Some notable pioneers in the space for legal products have built expensive business development teams that keep them from competing at scale, and other newer entrants are feeling their way through the cost of customer acquisition. With PartnerVine, firms are taking advantage of different distribution channels for different customer groups.

Pricing for law firm legal products

A sensible pricing strategy for a law firm’s legal products needs to take into account the current pricing strategies for tech described above, and the pricing for a law firm’s services, which will be distinguished from legal products as services are not as scalable and require expensive expertise with professional obligations and associated liability. For new and innovative products, law firms have pricing power, and most of the products we discuss with law firms fall into this category. With any pricing strategy, there’s a balance between pricing and volume, tempered by the discussions of innovation adoption and distribution in the next sections, which serve to increase the use of legal products generally. 

To look further at the balance between pricing and volume, there are usually two strategies for product companies to take with new products: the skimming strategy and the penetration strategy. The skimming strategy sells less product at higher margins, while the penetration strategy seeks to deter new entrants into the market by aggressively pricing products for higher volume. See the graph below:  


The Skimming Strategy may make sense for law firms concerned with protecting the price/quality ratio of their services. It also makes sense to test out the market and build experience. Even with a Skimming Strategy, law firms increase their return on investment with every sale and market their technology expertise. Given the importance of protecting the price/quality relationship between products and services, the Skimming Strategy makes sense particularly as the market for legal products develops. 


Branding presents several options for a pricing strategy, but also the risk of diminishing the upside of a smart pricing strategy. Setting up a separate brand for legal products allows law firms to build expertise in products without diluting the premier brand for bet-the-company work. It also leaves the product team with no branding advantage over the long list of tech companies that are not affiliated with law firms. A second option is a recognizable sub-brand, which will communicate that the products benefit from the reputation and skills of the premier brand. That recognizable sub-brand could be used not just for products but also middle-market services, so that the premier brand will not be linked to the more scalable services as pricing becomes increasingly transparent for high volume clients. 

The Innovation Adoption Curve

Unlike a traditional product pricing strategy, legal products also need to consider the innovation adoption curve, which means that any business model will have less volume than it would in a mature market.  Everett Rogers’ Diffusion of Innovations theory is based on the adoption of innovative crops in the 1950s,  and it has been applied successfully to many fields including legal technology, with Bill Henderson setting the standard for Legal Tech.  

Importantly for law firms, Rogers identified five factors that account for 49 to 87 percent of the rate of adoption of an innovation, which are as follows:

  • Relative Advantage
  • Compatibility
  • Complexity
  • Trialability
  • Observability

The factors are described from the perspective of a potential user, and are important parts of selling Legal Tech. PartnerVine has consulted with many law firms for how to meet these requirements, and one aspect of that discussion is the impact of those five factors on a firm’s pricing strategy. Some of those five factors contribute to a lower entry price for using a new product to spur adoption, and because that discussion lends itself to the size of the market rather than a pricing strategy within it, that discussion takes place alongside the pricing strategy above. 

Ethical obligations and a duty to price tech

Bar associations, particularly in the US, have been moving forward with the adoption of a duty to be competent in technology. In 2012, the American Bar Association approved a change to the Model Rules of Professional Conduct to include a duty to be competent in technology. That rule has been moving through state bar associations in the US. Almost all major law firms have adopted technical proficiency as a goal, and the investment in tech that leads to more productivity for lawyers has been booming.

With that duty of competence, a law firm strategy of not implementing productivity gains from technology is no longer tenable. As the investment required to implement technology grows, the question is how to price the investment required for that technology, which has not been done so far. Apart from the firms that are using technology to market their practices, the practice of a majority of firms has been to use tech internally, but obscure the time savings to protect the logic of a law firm’s hourly billing rate (which only makes sense after automated work has been done). In some cases, that situation has led to a padded bill. As the duty to be competent in technology turns into an increasingly large expense that is not recoverable with the billable hour, a law firm would be foolish not to price the product of technology separately from traditional services.


In conclusion, for those firms involved in the market for legal tech, or are considering selling products, you should treat every product separately and consider:

  • the price points of the current pricing strategies described above,
  • where the product should stand on Skimming and Penetration pricing strategies (which should be different by product),
  • coordinating your branding and pricing strategy,
  • addressing the Innovation Adoption Curve, and
  • getting ahead of ethical issues by pricing the automated delivery of legal services separately from your other services.

When we consider those issues, we come up with a pricing strategy that:

  • sets prices for the delivery of legal services with software separately from other services,
  • sells standardized products at volume in a channel with a low cost of customer acquisition (Full disclosure, that's what PartnerVine does, and it has always helped us that our principles align with our business model),
  • protects the high margins for other services (which include both legal services and legal tech consulting, which work on the same model), and
  • prices each product with an analysis of the factors above.

Further Resources

Each one of the considerations above leads to an analysis for a product. We've built proprietary data and solutions for that analysis, and would be happy to share it with you. If you would like to discuss, please contact us.

Pricing is a gating item for selling your legal products, but there are other gating items which we have addressed in a series of articles on Law Firm Strategy. We've outlined the most relevant ones here:

  • When thinking about pricing legal products, law firms have to first consider whether they want to sell legal products in the first place. If you are firmly in the top tier of law firms, you may want to follow an effective purchasing strategy. There is a limitation to that strategy though, because two areas of legal tech, platforms and AI/machine learning, are disruptive of the core services business of a law firm. We have written more on this topic in the article Law Firm Strategies for Legal Tech.
  • A law firm is a partnership that produces annual income. Good tech gets built over years. Getting the incentives right is an important part of any law firm legal tech strategy. We have written more on this topic in the article The Right Incentives for Legal Tech.
  • Decision making at a law firm is hard. The most conservative partner on a committee often ends up controlling decisions because uncertainty amplifies the perception of risk. We have written more on decision making at law firms in the article Law Firm Strategy: Decision Making for Tech.


This article develops ideas provided by the author for Michele DeStefano & Guenther Dobrauz-Saldapenna, New Suits: Appetite for Disruption in the Legal World, Stämpfli Verlag, 2019.

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  • Helpful article

    If you are looking to know more about how to price a legal product you might find your answer in this well put together article. If you any questions, the founder is highly reactive and will help you answering them! Great work