At WealthCounsel’s Planning for the Generations Conference in Chicago and in other recent discussions, I have learned much about how to offer a successful retainer fee based Client Retainer System and Estate Planning Maintenance. What follows is a checklist of factors to consider and best practices, should you offer a maintenance plan:
Primary Considerations:
- There are two essential components to a retainer fee based estate client maintenance plan
Access: Convenient access to legal advice as needed
Audit: An annual audit to spot significant changes in circumstancesThese two factors enable lawyers to apply their knowledge , experience and expertise without an unnecessarily large amount of their limited time
- Additional benefits that some lawyers provide include
Individual meetings Periodic document updates including POA updates and Trust restatementsThese additional two plan benefits enable lawyers to interact with clients, plus family members and advisors, but involve a significant amount of attorney and staff resources. These components will require a higher annual fee.
Either approach will provide about the same net profit for the law firm.
As the quantity of members in a maintenance plan increases, there is greater the need to consider a tiered approach. We see firms that employ the first two factors typically charging 10% or less of their average planning fees ($250.-$500.) and firms who include personal meetings and document updates at 10% or higher ($500.to $1000.) for their annual retainer fee.
Other considerations and common practices:
- It’s good to update financial power of attorney docs every two or three years
- It’s good to restate the trust every three to five years
- 20% of your clients will require 80% of your time
- If you offer personal meetings as an option, expect 20% of clients to use it.
- In the annual audit look for changes in addresses or changes in other assets, a new home or new asset may not be properly funded
- Estate administration is more efficient for plan members since there assets information is more current, properly titled and better organized. Consider offering a reduction in estate admin fees for plan members.
- Consider offering your clients a choice between tiered levels of maintenance plans.
- Some plans include basic docs for children when they reach college age
- Converting former clients to an annual retainer / maintenance plan can be done at a conversion ratio of 30-100%. The technique for conversion of old clients is 1) state the fact that ‘your documents need to be updated’ and 2) ‘we can update your documents either hourly at $400./hour or under the maintenance plan at $400./year, it’s your choice.’ This lawyer reported a 100% conversion rate. He also reported 2,700 clients on his maintenance plan and that he projects his firms’ new business will soon be self sustaining from maintenance clients based on updates and referrals from plan members.
- Consider sending the plans yearly audit and review package of materials of by certified mail. You may want to include diagram, schedule of assets, new POA and questionnaire, plus an invoice and perhaps updated POA documents.
- Use your practice management database to flag/tag the clients who have custom drafting
- If you train (clone) advisors about how your program works they can refer/send you clients who are pre-sold on your maintenance plan.
- The timing and topics for educational seminars for maintenance clients may include
- Discuss Changes in the law in the spring
- Experts at other times for subjects such as elder abuse; wellness; etc.
Finally, please explore our ‘Poyner Plan’ www.poynerplan.com our estate client updating system with facilitates information gathering, updating and report generation for plan members. One comprehensive report which even including a retainer invoice may be automatically generated individually as needed or very efficiently in large batches at the appropriate time of the year.
View our 2-3 minute video at:
http://poynerplan.premiersoftware.com/about-retainer-plans/poyner-plan-demo.html