I priced my first product like a lawyer. Here's why that was wrong

The first time I had to help put a price on a software product after leaving practice, I did what any lawyer would do. I treated it like a fee proposal. I worked out what it had cost to build, thought about what the client could bear, tailored a number for each prospect and kept a discount in my back pocket for the end of the conversation. It felt rigorous and commercially sensible. It was, almost line by line, the wrong way to price a product. Not because lawyers are bad at money, but because a fee proposal and a price are answering completely different questions, and I’d spent years only ever answering one of them.

I built a fee estimate, not a price

A fee estimate works from the inside out. You look at the work, estimate the hours, apply the rates and add a margin for risk. The number is a function of your effort. That’s a reasonable way to price a matter, because the matter really is mostly effort.

So my first instinct with software was the same: add up what it had cost to design and build, spread it across the customers we expected and add a margin. The result was a number that told me a great deal about our costs and nothing at all about what the product was worth to the people buying it. Software has a strange cost structure. The first copy is expensive and every copy after that is nearly free, so cost-based pricing either massively overcharges the first customers or massively undercharges everyone after them. The price had to be worked out from the outside in: from what the customer would otherwise spend to get the same result.

I quoted every client like a new matter

Lawyers are trained to treat each client as distinct. A new instruction gets its own scope, its own estimate, its own engagement letter. So I treated each prospect the same way, building a bespoke proposal shaped to their size, their mood in the meeting and what I guessed they’d accept.

The cost of that was enormous and mostly invisible. Every deal became a negotiation from scratch, which slowed the sales cycle. We couldn’t compare deals, because no two were priced on the same basis. And customers inevitably talk to each other, so the moment two firms compared notes, the bespoke pricing looked arbitrary, because it was. A product needs a price list: a small number of published tiers, applied consistently. It feels rigid to a lawyer. It’s actually what makes the price credible.

I discounted the way partners write off

In practice, writing off time is a relationship gesture. The bill comes in over the estimate, you knock some off, the client feels looked after. It’s so normal that it barely registers as a decision.

I carried that reflex straight into selling software, and it did real damage. A discount offered to smooth a conversation teaches the buyer that the list price is a starting position, and they’ll remember that at renewal. Worse, it tells them the product isn’t worth what you said. The rule I eventually settled on was simple: never discount for nothing. If a customer wants a lower price, they can give something back for it, such as a longer commitment, a case study, a firm-wide rollout instead of a single team or payment upfront. A discount should be a trade, not a gift.

I charged for the wrong unit

Lawyers price in time, so I instinctively looked for the software equivalent and landed on seats: a price per user. It’s the default in software, and it’s often wrong for legal tools.

The problem is that the value of a legal tool rarely tracks the number of people logged into it. It tracks the work that passes through it: the matters, the documents, the transactions. Per-seat pricing actively discourages the behaviour you want, because firms ration licences and keep the tool away from exactly the juniors who’d use it most. The better question is: what’s the unit that grows when the customer gets more value? Sometimes that’s matters. Sometimes it’s documents or entities or a practice area. Finding it takes longer than copying the default, and it changes the whole commercial relationship once you do.

What I’d do now

If I were pricing a first legal product again, I’d start from the alternative. What does the customer spend today, in fee-earner time, write-offs, outsourcing or risk, to get the result the product delivers? That’s the ceiling, and the price should sit comfortably below it while leaving no doubt about the value.

I’d pick the value unit before I picked a number. I’d publish a small set of tiers and hold them. I’d treat every discount as a trade. And I’d treat the price itself as a hypothesis, not a verdict: something to test, revisit and, in most cases, raise once the product has proven itself. Almost every founder I’ve mentored, lawyers especially, priced too low at the start and found it painful to correct later.

The deeper lesson is that pricing isn’t a calculation you finish. In practice, a fee proposal is the end of a commercial conversation. In a product company, the price is one of the most important things you’ll ever design, and it deserves the same iteration as the product itself. I didn’t know that the first time, and I paid for it in slower deals and smaller ones. Lawyers turned founders have every analytical skill they need to price well. They just have to stop answering the question “what did this cost us?” and start answering “what is this worth to them?”