Law Centres Network: advice on how to set prices

28 Jan 2016

The Law Centres Network is the representative body for the national network of community-based Law Centres. There are currently 48 Law Centres which are not-for-profit legal practices.

In recent years, cuts to legal aid have meant that Law Centres have had to cut back on the support they are able to offer their clients, particularly on matters relating to welfare benefits, immigration, housing disrepair, debt and unfair dismissals - to name a few examples.

Law Centres have typically used grant and contract funding to provide services for people who cannot afford a lawyer. Reductions in these funding flows means that many Law Centres are now considering charging for some services in order to cover their costs. The Law Centres Network approached Pro Bono Economics for advice on how to set prices, based on how much particular households across various income groups typically spend on legal advice.

Available data on expenditures on legal services was inconclusive, however volunteer economists from the HMRC  provided the Law Centres Network with advice on price-setting strategies, drawing on economic theory. Advice from the team of volunteer economists includes considering a “no win, no fee” model (however this would only apply to services that result in a financial pay-off), a “freemium” model, whereby all customers get a basic level of service but additional features cost more money, or a “peak pricing” model where Law Centres only charge for services outside of normal working hours (on the assumption that people who access services during the day may be poorer in order to avoid a form of price discrimination). Volunteers also advised on how best to manage profits and costs.

"Pro Bono Economics provided LCN with expertise that is completely outside our skill set and not easily accessed within the professional communities that we work with. The advice provided is critical to turning a promising idea into an ongoing sustainable service."

Our thanks to Robbie Barkell, Darren Warren and Shahbaz Baloch for their time and hard work on this advice report.