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How one agency is making an attempt to persuade know-how purchasers to embrace subscription pricing

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When Joyce Tong Oelrich and her former Microsoft Corp. colleague Zohra Tejani mentioned beginning their very own legislation agency two years in the past, the skilled in-house legal professionals agreed that they need to take a subscription-pricing approach with purchasers.

They thought charging a set month-to-month payment can be interesting to in-house counsels at know-how firms who had been searching for consistency in billing, moderately than wild fluctuations. Plus, she and Tejani knew that attorneys working in tech had been already conversant in the subscription-pricing mannequin, on condition that lots of their firms charged their customers in that vogue.

But Tong Oelrich says when she and Tejani started contacting potential purchasers as a part of their “beta launch” of Tong Tejani in fall 2019, most indicated that they weren’t able to decide to subscription pricing.

“Every single time we would bring up the idea of a subscription model, the responding question was: ‘But really, what’s your hourly rate?’” says Tong Oelrich, a former in-house lawyer at Facebook.

“I think the struggle they had is the scope of work,” she adds. “How do they justify paying an outside attorney a set amount of money every month without knowing what their needs are going to be?”

The founders of Tong Tejani, which makes a specialty of authorities contracts and has primarily technology-sector purchasers, stored that preliminary consumer suggestions about subscription pricing in thoughts when formally launching the agency in May 2020.

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As a outcome, the Virginia-based agency determined to begin off charging an hourly fee to some purchasers and stuck challenge charges to others. The hope was that after purchasers grew to become comfy with the agency’s work, they’d think about transitioning to a subscription plan.

Tong Oelrich says that has occurred, with a Fortune 50 know-how business being among the many purchasers who’ve switched from a extra conventional billing approach to the subscription mannequin.

“After doing a couple fixed fee projects for them, the attorney that we work with called us and said: ‘I have a set of seven projects that need to get done within the next year. Instead of having you quote all seven projects at a fixed fee, why don’t we agree upon a set amount every month and we will go with that?’” she says. “She came around to the subscription model after seeing our work for the fixed-fee projects.”

As for the agency, Tong Oelrich says the subscription mannequin is helpful as a result of it offers common revenue. She argues that it additionally higher permits their agency to turn out to be trusted advisers to their purchasers and really feel like they’re part of their purchasers’ companies.

“In a normal situation when you are billing by the hour, you may not feel like you have the time or you don’t feel right in billing the customer when you are just trying to get to know them,” she says. “In this case with the subscription, our best interest is to understand what they do and how they do it, so we can provide the best advice.”

Tong Tejani affords completely different tiers of subscription pricing, with essentially the most primary tier being answering consumer cellphone calls and offering e mail responses that don’t concern producing work product. The agency additionally continues to supply purchasers hourly charges and stuck payment challenge pricing.

“We like to meet our clients where they are and with what they want,” Tong Oelrich says.

Tejani, the opposite founding associate of the agency, is the one different legal professional. She led laptop software program business VMware’s public sector authorized crew previous to the launch of Tong Tejani.

To scale up for bigger tasks, Tong Tejani turns to exterior authorized assist. Tong Oelrich says two platforms that the agency makes use of to convey on freelance legal professionals, or what she calls “alliance attorneys,” are Latitude Legal and the Montage Legal Group.

Utilizing contract legal professionals helps restrict the small agency’s overhead, she says, and it permits the agency to convey on attorneys who’re skilled in specialised areas.

“We don’t want to turn into the traditional law firm and hire a lot of associates and have to train them,” Tong Oelrich says. “We think that this is a more efficient and effective solution for our clients and for ourselves.”

In This Podcast:

<p>Joyce Tong Oelrich</p>

Joyce Tong Oelrich

Joyce Tong Oelrich is a founding associate of Tong Tejani, a boutique legislation agency specializing in authorities contracts. She beforehand labored as an in-house legal professional at Facebook and the Microsoft Corp. for almost a decade, specializing in authorities contract compliance. Before that, she practiced on the BigLaw agency Bryan Cave Leighton Paisner, wherein she represented business firms conducting enterprise with authorities entities.

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