Often the biggest task for me as a marketer is to seek to close the enormous gap between those who buy legal services, and creating and delivering what would be necessary to entice the demand of those who don’t.
The credence nature of legal services – the risk, the uncertainty and the cost – usually result in inexperienced buyers, both individuals and commercial organisations, doing nothing to resolve their legal problems. But now, given the demise of legal aid and the changes in law affecting personal injury, the ‘do nothing’ approach will not only be compounded, but we’ll also see an increasingly pronounced inequitable distribution of legal resources. The already-great latent demand for legal services effectively becomes greater.
Lucy Scott-Moncrieff, Law Society President, recently advocated ‘unbundling legal services’ on a ‘pay as you go’ basis to clients as a result of the demise of legal aid. The comments section of the article was overrun with (largely anonymous) negative and critically horror-struck proclamations. Very few thought to comment positively. Very few saw the opportunity. Whilst Scott-Moncrieff appreciated that unbundling provides ‘a number of regulatory challenges’ – the point of resonance from a marketing perspective is that she added ‘they are not insurmountable’. And it’s on that point I agree. Nothing is insurmountable.
The ‘profession’ has become a business and is subject to ever-increasing competition like any other. The profession has to concern itself not with the strict adherence to ethical principles of old, but of principles of market demand. Firms have to start considering bridging the latent gap of what is available and what is actually needed. They have to focus on orientating themselves to identify opportunities and exploit them at the right time, concerning themselves with the feasibility of concepts such as ‘unbundling’ as a service solution to meet clients’ needs.
In the US, ‘unbundling legal services’ is a tried and tested form of legal service delivery, whereby the lawyer breaks down the tasks associated with a legal matter and provides only representation to the client pertaining to a portion of their legal needs. And it’s gone someway in bridging the latent gap and providing some legal services to those not only who can’t afford legal services. Its origins are in middle-class driven consumerism, increasing legal access to the middle incomes. Development grew largely out of the family law field, with divorce being one of those popular areas of law which lends itself to unbundling particularly well. Clients find unbundling attractive not only as a cost effective option, but also because it gives them more control over the legal process and strategic decisions.
As I see it, unbundling offers a potential solution to the UK legal market. While the moniker isn’t particularly helpful (‘unbundling’ suggests falling apart, an organised state becoming disrupted), the idea itself carries considerable potential, not as a breakdown of service line or reduction of lawyers’ efforts, but as a means to bring into the mind-space the overall concept of customisation of legal services as part of an overall market strategy.
Why should legal services be customised?
It’s short sighted to think unbundling or customisation is only for those who cannot afford legal services. Consider also those clients that want more and are willing to pay more for adaptation to their particular needs. Clients benefit from customisation because they receive the exact offering they require, and legal service providers benefit because they minimise the strategic risk of not solving their clients’ problems and satisfying their needs.
As I see it, there are a number of reasons why the UK legal profession must adopt some form of service line customisation:
Every client is their own market – Both organisations and private individuals have desired products and services that meet their exact needs since the 80’s. No longer does ‘one size fit all’. Clients expect it their way and are willing to pay for it. The heterogeneity of client needs has expanded. This offers firms a tremendous opportunity.
Customisation creates loyalty and deepens relationships – Every firm must strive for loyalty. Firms want to increase client spend, retention and lifetime client value. Clients that customise a service are more likely to be repeat purchasers and become brand advocates. Customisation of legal services involves clients at the outset, participating in the design of their service. By allowing clients to become part of the design process, they can create a product or service that meets their particular, varying situations.
Nature of competition – The marketplace is seeing a number of new entrants such as PobateWizard.co.uk, heavily focused online, providing unbundled products and services in the form of guidance, advice, strategy, review, drafting. These are delivered to clients by either technological platforms, or document automation, or by lawyers from a branded network. The competition lines have already been drawn. Traditional firms have to compete. Customisation may also hold the key to competing against large ‘standardised’ service providers, whose size and scale of operation render it relatively difficult to customise and unbundle service delivery.
From a marketing perspective: is customisation of legal services viable?
Fundamentally, customisation and the need for it arises out of the principle that not all client requirements are created equal. Added to this, I believe customisation lends itself well to ‘services’. You see, clients do not buy legal ‘services’ per se. Whether firms recognise this or not, clients buy a cluster of ‘components’ or ‘modules’ that form the overall legal service. And some components of a legal service are more important to the client than others.
By breaking down the ‘full-service’ into individual components, firms can satisfy those client needs that require less and those that demand more. Firms can identify market segments where components are most valued, thus aiding segmentation and targeting. Firms can identify those components which may be dropped without reducing the price, and those components clients are prepared to pay a premium price to retain. Its pricing implications mean firms can also seek to place a monetary value on the individual components that form the overall service package. The final price being based upon the value that clients ascribe to the different components.
From a marketing perspective, ‘splitting out the components’ enables the marketing message to be fine-tuned; it also enables a number of other marketing decisions to be made with greater precision. It’s therefore worthwhile discovering which components of a service are more important to the client.
For firms to embark on a process of customising legal services, they should consider these three key competencies:
i) Integrating the client into the value chain
ii) Breaking-down service lines into individual modulars
iii) Developing flexible processes
Integrating the client into the value chain
When it comes to clients, firms need to start ‘thinking in reverse’ and basing their service provision on actual client demand rather than satisfying legal process. Client preferences are changing constantly, driven by cost, quality, availability and technology. In order to boost client loyalty and create a viable long term client relationship, clients should be motivated to continuously purchase customisable services exclusively from one legal services provider.
Customisation of legal services is about integrating the client into the firm’s value chain. Firms are being required to reconnect with their clients and to compete effectively by recognising market drivers and investing in a deep understanding of client needs and desires. It’s about grasping what clients really want. Listening to them more. Understanding them better. Gathering valuable client information to attain reliable data on market demands will result in services with better market suitability. Merely satisfying what clients ask for is no longer enough for survival in a legal market environment of intense competition.
Firms should integrate their value chains by redesigning their structures to move away from the hierarchical set-up, with a focus on management control, to horizontal organisation built around the client, processes, teamwork and empowerment.
IT plays a vital function in identifying and quantifying changing client requirements; and also supporting the firm to prepare for future economic and market trends. Client integration is led by the success of the application of service configuration systems. The development and implementation of appropriate systems to be embedded in practice management systems for client interaction is an important success factor of legal services customisation. Service blue prints must be devised based upon the variants of service customisations and the modules or components selected.
Breaking-down service lines into individual modules
Achieving modularity is the key to legal services customisation. Modularity allows firms to balance the degree of individuality offered and internal efficiency achieved. Legal services need to be broken down into modules and built back into a modular system that is composed of components that are designed independently yet still function as an integrated whole.
For example, a legal service could be broken down into two variants of modularity – those that form the core legal service and those around the legal service, using the 7’p’s of professional services marketing as a basic framework, i.e.:
i) Customising the ‘core legal service’. This is essentially customisation of ‘product’. The core legal service can be customised through addition or removal of the main service components including 1) client advice 2) legal research 3) gathering facts 4) discovery 5) negotiation 6) drafting of documents 7) document automation and 8) court representation.
Each legal ‘product’ or service line will need to be modularised differently according, not only to its nature, but also to the experience of the client buying the service (i.e. in-house counsel) or the complexity or divergence of the service.
ii) Customising the service ‘around the legal service core’. Here the service around the core can be customised. This can be based around ‘price’, ‘place’, ‘people’ and ‘process’. A range of pricing methods can be offered to the client such as fixed fee, hourly rate, capped, blended. Why give them one price when you can provide a range of pricing solutions? The ‘place’ where services are offered can be tailored. Online. In-office. At your client’s address or office. People can be ‘chosen’; senior lawyers can provide advice, yet the client may choose, at extra cost, for seniors to do legal research and fact gathering when historically it may have been provided by juniors. Process can be customised through the addition of features or through creative delivery options.
Firms must define clearly the dimensions along which they are prepared to allow their clients to individualise their purchase. Clients will generally prefer to be told what their limits are and then be allowed free to rein within them. Firms must seek to establish what limits their clients are happy to live within and then organise their operations accordingly.
Developing flexible processes
Firms must be able to shift their full-service provision from a system based on a series of tightly integrated processes to a system of loosely-linked autonomous units that can be configured in order to fulfil clients’ individualised demands.
To do this, firms could apply a number of flexible operational processes:
Legal service co-ordination. This process manages the initial dialogue with the client. Receiving and interpreting the client’s wishes, coding them for verification by the client, finding a perfect solution for the client and generating the details of the order.
Service development and design. This process handles the design for the client. Compliance with external and internal standards is within its scope.
Service validation. This process is responsible for confirming the ‘service design’ and its translation into a set of operating procedures and rules. It will typically generate the ‘process map’ for the customised service and provide guidelines and processing instructions.
Service fulfilment and realisation. This process manages the order fulfilment and encompasses the activities executed in the manufacture of the legal service and includes supplier activities, internal processes and delivery activities.
Post-service process. These are activities that (may) follow the completion of a legal service, such as ongoing technical guidance as part of a retainer contract.
Law firms need to eliminate their operational inefficiencies to deploy software based service configurators within practice management systems that make it possible to add and/or change functionalities of a core service or to build fully customised systems from scratch.
The character and importance of each component or module may vary for different market segments. And remember, clients’ needs change over time. This means that finding the best fit between a service’s optimal mix of components and client preferences is an iterative process that should be updated on a regular basis.
First steps for firms
Before pursuing legal services customisation a firm should analyse carefully the need for customisation and also the feasibility of customisation. Firms need to ask themselves:
Can we isolate the technical and commercial components of our services?
What knowledge do we have of the components of our service that clients most value and prefer and would be willing to pay for?
What knowledge do we have of the components of our service that clients do not value or rate as similar to competitors?
Do we know the true price of our service?
Can we place a perceived value on these components?
Would clients pay more/less to retain/drop any components?
Can we provide add on services which would furnish a service distinction?
For me, as much as I hate the term ‘unbundling legal services’ – I see it as the opening opportunity for customisation of legal services.
As a strategy, isolating legal service tasks and attributes for which clients are prepared to pay has a considerable marketing spin-off. It would be wrong for firms to think ‘unbundling’ or ‘customisation’ is designed to reduce lawyer demand and reduce cost. Firms should consider its relevance to all market segments, not just those looking to reduce costs. Yes there are those clients who would benefit from having fixed or more certain costs but there are also clients who have, despite industry views as to capabilities or competencies, DIY mentalities; clients who live in remote areas; and clients with some legal or professional knowledge or training, and those who would feel empowered by having more control of their legal matter or undertaking some of the work themselves.
Customisation won’t be a problem for large firms with a limited number of large clients. At the high street and regional end of the market, where a firm may have lots of individual clients, customisation is possible through state of the art technology and systems and employee empowerment.
But customisation isn’t going to be suitable for every type of client. Many will prefer the security of leaving everything to a professional, and may see a reduction in their bill as secondary to the peace of mind, and ease and convenience of handing the matter in its entirety over to a lawyer to ‘get the whole job done’. Thats the opportunity firms have to take advantage of. There are those who want full service provision. And of course there are those who not only want a full service but will happily pay more to have their particular needs catered for around the core service delivery.
The point is, customisation should be considered and pursued because today’s clients demand that they be treated as individuals, and firms should be particular about satisfying a client’s specific needs.
His passion for marketing and client acquisition has developed into a 20-year career, working for some of the leading professional service firms in the UK.
Graham can be contacted by email: email@example.com or by mobile: 07484 644846.
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