Commoditizing legal services

In introducing Commoditizing Legal Services, Heather writes “When many law firms are as fungible as peanut butter, savvy productization and exemplary service are differentiators”.

One of the most significant trends brought to the legal market by alternative law companies is the variety of delivery methods that make legal services less complicated and expensive, and therefore easier for clients to purchase. In response, law firms that wish to stay relevant and solvent in this increasingly competitive field need to market their services using a hybrid model. (In other words, these ‘hybrid models’ are a way of a traditional BigLaw business model firm’ remaking itself by adopting or integrating elements of the NewLaw business model. George)

While for the time being the most complex legal services may continue to be scoped, executed and billed at an hourly rate — the lifeblood of many lawyers and law firms — astute clients are increasingly expecting that more routine and easily commoditized services will be packaged as products.

Packaging a service has six features, namely: 1) defining what it is, 2) defining the expected outcome, 3) describing what the package contains, 4) describing benefits to the user, 5) offering easy access and delivery, and 6) providing a fixed cost.

Time and money

The advantages of offering legal services as products are twofold: time and money. While delivering a service takes time, there are only 24 hours in a day. As a lawyer, do you really want to spend precious hours doing low-level, mind-numbing grunt work? Is there any advantage in paying others in your firm to do routine work that often has to be written off when clients balk at the antiquated practice that enables young lawyers to learn on their dime?

And really, can you honestly stand to bill for small stuff? Should you even bother?

Your experience, professional reputation and rates all have a ceiling. The notion that the more advanced one is in one’s career the wiser one is and, therefore, justifiably more expensive, is being pushed back against ferociously by clients who have had it with big bills for little things. Besides, competing on rates is a zero-sum game; eventually you’ll lose, because there will always be good, less expensive alternatives.

Nothing new

Selling legal services as products is nothing new, but will become much more prevalent as clients demand better service, faster turnaround, greater involvement during the process, full transparency on project management, and cost structures that enable concise budgeting without financial surprises.

Canadian lawyers have been providing transparency and fixed pricing for years. Jane Harvey has headed up a storefront law firm since 1980, with price lists posted in the windows for passersby to see as well as on the firm’s website. Offering legal services in real estate, family, wills and estates, litigation and business law, Jane Harvey Lawyers has grown to seven locations in the Greater Toronto Area, most of which are located in shopping malls and concourses. Prices include bottom-line totals with fees, taxes and costs of expected disbursements listed line-by-line.

Axess Law has enjoyed success since it launched in 2012, using a similar structure and service offerings with six locations in retail stores and supermarkets within the Greater Toronto Area.

The Amazon effect

Amazon entered the legal service market early last month with IP Accelerator, a venture that introduces a select network of law firms based in the U.S. to businesses worldwide needing intellectual property services. In time, Amazon expects to expand its service roster to law firms and trademark offices in other countries around the world.

Amazon says the participating U.S. IP law firms have agreed to pre-negotiated rates for standard services involved in obtaining a trademark registration. They are also capable of assisting with copyright registrations, design patents and other IP protection strategies.

These vetted firms should be able to save clients both time and money in securing IP rights as well as enable them to benefit from Amazon’s brand protection program, which identifies and removes bad online listings to help protect a brand’s credibility.

Amazon has, in effect, packaged IP legal services. Client fulfilment indeed!

Something for nothing

How does all this affect lawyers and their firms? Strong market positioning built on three pillars of niche, differentiation and brand, along with continuous caring and trusted relationships have always been and always will be critically important to securing and retaining valuable client loyalty. So will determining legal services that can be creatively commoditized, packaged and sold as a subscription, at a flat-fee rate, or even given away free of charge.

Palo Alto-based Cooley Go, a division of Cooley LLP, has catered to the Silicon Valley crowd since 2014. Cooley Go has an open store where entrepreneurs with other businesses can get non-disclosure agreements and other small legal documents and services, tips, tools and guides for free. Giving away the small stuff is a huge help to startups and creates goodwill and trust.

Cooley is smartly playing the long game and betting that a payoff will happen if and when these small ventures grow to the point where they need assistance on more complex legal issues, such as an M&A or IPO.

The upshot

On one hand, these smart firms are offering legal services and tools to clients at transparent and predictable costs, while on the other hand they are providing value through thoughtful and consistent client experience. And isn’t that what really matters to clients and those privileged to serve them?

Besides, delighting clients in this way, along with giving away the small stuff for low to no cost, beats raising their ire with ambush invoices that list a string of “0.10”s for precious little that they consider to be of value.

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