Your Guide to the Insurance Backed Retainer Business Model – The Pros and Con’s
From a client point of view the last two years demonstrated the wisdom of the insurance backed retainer business model.
While there was an overwhelming surge in demand for advice this provided the perfect opportunity to prove value in business relationships, a fact proven by the fact that many employment teams working this model achieved a record level of fees. Solicitors tell us that employers who had one our policies, benefitting from continuity of cover and cost, reported maximum satisfaction with their service.
We recognise that the insured/retainer model will not work for all clients or in every circumstance, but it is now tried and tested and works really well when backed by an insurance that you can trust.
If you are a firm who have not used this business model before, then we would like to help you shut the door to the numerous HR competitors who are trying to steal your work away.
Being competitive is key, but this does not mean being cheapest -after all a solicitor’s professional advice is the key differentiation. Success in this area depends on understanding the moving parts in the package- It’s all about achieving the best balance of cost between fees for advice and premiums for tribunal indemnity and factoring these into a competitive offering. It is not always possible to not get the monthly fee right for every client, every year. A more holistic approach to pricing is needed as volume profits do not necessarily flow from making a lot of money out of every single client, high profits are achieved by having lots of clients!
It is not always possible to not get the monthly fee right for every client, every year. A more holistic approach to pricing is needed as volume profits do not necessarily flow from making a lot of money out of every single client, high profits are achieved by having lots of clients!
ON THE PLUS SIDE
- Improved and more certain cash flow from regular monthly fee income
- Cements a client relationship and facilitates marketing from other areas of the firm • Ensures you get the work for the client’s ET claims – prevents claims work being farmed to an insurance panel
- Provides the client with continuity of advice from workplace to courtroom
- For the client, the service is a fixed overhead for both HR advice and insurance indemnity giving them balance sheet certainty over costs, dividends and profits – it insulates them from large, unexpected legal bills
- Efficiency savings – more clients creates volume of work and allows junior staff to handle routine requirements and frees up the most experienced fee earners to focus on more difficult situations
- You close the door to competitors for the duration of your contract
ON THE DOWN SIDE
- You can earn higher fees for distressed situations and pay as you go assistance, provided the client beats a path to your door that is!
- Monthly use may sometimes occasionally exceed the monthly fee • Fluctuating levels of demand can stress the team – but best balanced by larger numbers of clients
- You leave the door open to other providers who may make a service that could shut you out for several years
Those law firms who succeed in this sector usually do so with our help, so if you would like to explore this subject further, why not ask us for a virtual meeting to discuss further?
With around 3000 satisfied clients and 15 years’ experience in this sector you will not find a better partner.
Call us on 01935 389812 – ask for Mark Baker or Brian Dunk
