The hourly billing model has become a thing of the past for many estate planning attorneys, who have shifted to more modern pricing strategies. Providing clients with a clear picture of the costs of retaining you makes sense, especially for solo practitioners and those in small firms. Many attorneys offer several value-based price points that move away from a time-based model to one that represents what is actually delivered to the client. Read on to learn the benefits of innovative pricing models and how to implement them in your law practice.

Understanding the "Good, Better,  Best" Pricing Model 

The “good, better, best” pricing model, also called tiered pricing, may have been popularized by Starbucks with their tall, grande, and venti options, but we have experienced this pricing structure for decades. Every time we go to the gas pump, we can choose regular, plus, or premium gasoline. Businesses such as car washes and cable TV companies use this concept. It dates to a century ago, as General Motors attracted a variety of customers by selling automobiles at tiered levels of luxury and price with Chevrolets, Buicks, and Cadillacs.

The psychology of this approach makes sense, as you are replacing a “yes or no” decision with a “which one” decision. Surprisingly, up to 40 percent of consumers will choose the best option you have to offer. You can also benefit from the Goldilocks effect, as many will find your better option to be “just right.” 

How to Implement Good, Better, Best Pricing 

Today’s consumers are empowered by information, buying everything from cars to houses solely based on their online research. That is why presenting them with several clearly defined options can convince them to choose you. This transparency will also build the trust you will need when you represent them. The options you provide will clearly illustrate the high value of your estate planning services. 

When you implement a good, better, best pricing model, make sure that the bundling options make sense and are separated clearly. Here is an example:

• Good: Trust-based estate plan, outright distributions to beneficiaries, and ancillary documents
• Better: Trust-based estate plan, continuing trusts for beneficiaries, and ancillary documents
• Best: Trust-based estate plan with estate tax planning, continuing trusts for beneficiaries, trust funding, and ancillary documents

Note that the levels are based on the complexity of the plans. A Good plan would not include items such as marital deductions, continuing trusts, and estate tax planning, which may be found in a Better or Best plan.

One selling point for a Best plan could also be enrollment in a client maintenance plan, which allows a client to update their estate plan annually. A Best plan could cover the first year’s dues of their maintenance program membership, and you can bill them for their membership each year thereafter. While maintenance plans are outside the scope of this article, they have the added advantage of continuing contact with the client’s referrals.

Here are more tips on how to implement a good, better, best pricing model:

• Three is the magic number; if you must have a fourth choice, give it a prestigious name like “Platinum”
• Use demographic data to learn about the various needs of your client base
• Make sure your bundles make sense and are targeted to a specific customer persona
• Compare apples to apples (have one good, better, best pricing model for will-based plans, and another for trust-based plans)
• Make your lowest priced option a “fighter brand” against do-it-yourself options, with your personal service as a selling point
• The Best option should not cost more than 50 percent of the Better option

Other Pricing Strategies

If you are not ready to implement a tiered pricing system in your estate planning practice, you have other options. A hybrid model could involve a flat fee for setting up the estate plan, followed by an hourly rate for working on funding it. 

You could also have a semi-flat one-size-fits-most price that will work for all but a few clients. A third option is a flat fee for a basic estate plan, with additional services added à la carte. For example, you could have a price for a basic estate plan that includes a simple will and ancillary documents, with documents to plan for minor children added on for an additional cost. Bundled or packaged pricing could make sense if you notice clients using the same types of documents. Lastly, some practitioners do indeed fall back on hourly billing practices. While most estate planning practitioners are moving away from that, it might work best for you, your practice, and your sanity.

Learn More about Estate Planning Pricing Strategies

If you would like to learn more about pricing strategies, along with other practice-building fundamentals, WealthCounsel’s Estate Planning Bootcamp may be for you. An exclusive, members-only workshop, Estate Planning Bootcamp is designed specifically for new and transitioning estate planning attorneys who want to build a strong legal foundation along with practice-building skills.

What you gain with Estate Planning Bootcamp:

• Education and expert guidance from knowledgeable speakers experienced in the practice of trusts and estates law
• Practical tools and resources to help you build and operate a successful estate planning practice
• Access to a close-knit community of like-minded professionals to grow, share, and network