Much legal work is one-off: you do a matter, get paid, and then need the next matter. This makes income unpredictable, feast or famine. Recurring revenue, income that comes in regularly and predictably rather than only from one-off work, makes a practice far more stable and less stressful. For the right practice, building recurring revenue is one of the most valuable things you can do. Let me explain how, within the rules.
Quick answer
Recurring revenue is income that comes in on a regular, predictable basis, rather than only from one-off matters, and it makes a legal practice more stable, predictable and less stressful. The main way lawyers build recurring revenue is through ongoing client relationships and arrangements, especially retainers, where clients engage you on a continuing basis for ongoing services or availability, giving you predictable, recurring engagement and income.
Other contributors can include ongoing or repeat work from clients with continuing legal needs and, for some practices, other recurring offerings consistent with their practice and the applicable rules.
To build recurring revenue:
- Identify clients and work suited to ongoing arrangements.
- Set up retainers and continuing relationships clearly and compliantly.
- Deliver consistently to sustain those relationships.
- Cultivate long-term client relationships that generate ongoing work within the professional conduct rules.
For advocates, client-getting must remain within the applicable professional rules, so ongoing work should come through good service and genuine professional relationships rather than advertising or solicitation. Recurring revenue rewards strong, lasting client relationships, reliable service and well-structured ongoing arrangements. The keys are building ongoing relationships and arrangements, especially retainers, setting them up clearly and compliantly, delivering consistently, and cultivating lasting client relationships.
Why recurring revenue matters
One-off work means constant uncertainty: after each matter, you need the next, so income can swing between feast and famine. That can make planning difficult and create unnecessary stress.
Recurring revenue, income that comes in regularly and predictably, helps smooth this out by giving your practice greater stability, predictability and resilience. It lets you plan, reduces the pressure of constantly chasing the next matter, and can make the practice more sustainable. For these reasons, building recurring revenue can be a valuable improvement for many practices. See “Cash-Flow Management for Independent Lawyers.”
How to build it
Retainers and ongoing arrangements. The main route is to engage clients on a continuing basis through retainers or other appropriate ongoing arrangements for services or availability. This can provide more predictable, recurring engagement and income. See “How to Set Up Retainer Arrangements With Clients.”
Ongoing and repeat work. Clients with continuing legal needs can provide ongoing or repeat work over time, particularly when you build strong, lasting relationships and deliver reliably.
Other recurring offerings. For some practices, other recurring offerings can contribute, provided they are consistent with the nature of the practice and the applicable rules.
Lasting client relationships. Underlying all of this is the quality of the client relationship. Ongoing work and retainers are more likely to continue when clients value and trust your service. For advocates, this must be developed through permissible professional means, not advertising or solicitation.
Set it up well and within the rules
Building recurring revenue works when the arrangements are set up clearly and compliantly, and when you deliver consistently. Retainers and other ongoing arrangements should clearly define what is covered and comply with applicable rules. See the retainer and fee guides for more.
Obtaining and keeping clients must also remain within the professional conduct rules. For advocates, ongoing work should come from excellent service and genuine professional relationships rather than advertising or solicitation. Build recurring revenue on the foundation of great service, strong relationships and well-structured, compliant arrangements.
YLCC ACTION STEP: Identify clients with genuine ongoing legal needs and consider whether clear, compliant retainer or ongoing arrangements would suit those relationships. At the same time, cultivate strong, lasting relationships through excellent service so that clients with continuing needs can continue to work with you. Deliver consistently, define arrangements clearly, and build recurring revenue within the applicable rules.
If this is you
If your income is feast-or-famine: Recurring revenue can add stability and predictability. Look for suitable clients with ongoing needs and consider retainers or other appropriate continuing arrangements. See “How to Set Up Retainer Arrangements.”
If you rely entirely on one-off matters: Look for clients with continuing legal needs and cultivate lasting relationships so that work does not have to restart from zero each time. Good service is what helps those relationships continue.
If you are unsure about the rules: Make sure your retainer and ongoing arrangements comply with the applicable rules. Remember that client development for advocates must also stay within the professional conduct framework, so build recurring work through excellent service and genuine professional relationships rather than advertising or solicitation.
PLEASE DON’T DO THIS: Please don’t rely entirely on unpredictable one-off work when appropriate recurring arrangements could add stability, and don’t set up ongoing arrangements vaguely or without considering the applicable rules. And please don’t try to build recurring clients through advertising or solicitation where those activities are restricted. Build recurring revenue through great service, strong relationships and clear, compliant arrangements. This is general guidance, not legal or financial advice.
FAQs
- What is recurring revenue in a legal practice? Recurring revenue is income that comes in on a regular, predictable basis rather than only from one-off matters, making the practice more stable, predictable and less stressful.
- How do lawyers build recurring revenue? Mainly through ongoing client relationships and arrangements, especially retainers, along with ongoing or repeat work from clients with continuing needs and other appropriate recurring offerings.
- Why does recurring revenue matter? It helps reduce the feast-or-famine cycle of one-off work, giving the practice greater stability, predictability and resilience and reducing the pressure of constantly chasing the next matter.
- How do I get recurring clients within the rules? Through excellent service and genuine professional relationships that lead clients to continue working with you, rather than through advertising or solicitation where those activities are restricted.
- What sustains recurring revenue? Consistently good service, strong client relationships and clear, well-structured and compliant ongoing arrangements.
