Posted by Simon Goldhill of Legal Futures Associate Simon Goldhill Consultancy
Goldhill: the reason that Amazon and Tesco have become successful is by looking after their customers, not ripping them off
According to Professor Gillian Hadfield of the University of Southern California, we live in a world that is “flooded with law”. Surely lawyers, with their training, experience and understanding of legal issues, should be overwhelmed with demand for their help in navigating a safe route through our daily existence? Yet all the evidence suggests otherwise.
The Legal Services Board has recently published an analysis by Professor Pascoe Pleasence and Dr Nigel Balmer of an extensive and far-reaching survey of nearly 10,000 small businesses into their use of legal services and responses to legal problems. These same authors have previously conducted research into the consumer legal market.
In their view, there are striking similarities between the current way in which the consumer and the small businesses legal markets operate.
One major problem is that, despite Professor Hadfield’s views, there are many instances where issues that have a legal flavour are simply not recognised as such. What is staggering, however, is the response of both individuals and small businesses once they recognise that they are facing a legal problem.
The percentages turning to lawyers (solicitors or barristers) for any help or advice when faced with a legal problem are strikingly small – only 15.9% of small businesses and 6.5% of individuals
By contrast, the proportion of small businesses and individuals who look for no help at all is staggeringly high – 60.9% and 56.1% respectively. And there is a real and significant cost. Ministry of Justice economists have estimated the cost to individuals as over £13.5bn over a three-and-a-half-year period. For small businesses the cost could be much higher – as much as £100bn a year.
What an opportunity! And what should law firms be doing to take advantage of it?
For many, the biggest challenge will be to get beyond the passive mentality of just being there when clients decide they need them. There is a wealth of research which demonstrates quite clearly that people (and businesses) tend only turn to lawyers for event-drive transactions (rare at best, if not merely once or twice a lifetime). Lawyers only tend to get used when people don’t think that they can deal with an issue or transaction without them.
That’s an awfully difficult service to try to sell. “Come and see me when you decide to move house/change your will again/when one of your parents dies in 10 years’ time” doesn’t lend itself to a client-centric marketing and sales strategy.
This lack of a strong distribution channel is one significant reason why many firms’ business models appear vulnerable.
So back to that question I posed above. One answer is a move away from the current largely reactive engagement with the public. Firms need to get properly and pro-actively engaged with their existing and potential client base. This goes much further than just sending out legal newsletters and news of staff charity fund-raising days. I’m talking here about a real shift in mind-set, adopting the sort of customer service values that operate successfully in the commercial world outside of the legal market to provide things that people actually find of value.
This may be anathema to those who equate commercial values with an inevitable lack of the standards that only a professional can provide. I’m afraid that they are wrong. The reason that Amazon and Tesco have become successful is by looking after their customers, not ripping them off.
In any event, the liberalisation of the market means that, whatever they think, what is successful in the commercial world will be introduced into the legal market.
So amongst the ideas that might work, how about providing, for free (yes, really!), the sort of information that enables individuals and businesses to understand the flood of law that surrounds them and that there are ways to access advice and assistance that suit them, without all of the actual and perceived risks that put people off approaching lawyers.
And break down some of the barriers – make yourself accessible via the internet, demystify the language you use to communicate, remove the ticking clock. There are even ways to put the client in control of the extent of the legal input they require and pay for.
And let’s use technology – not to replace people, but to assist. When you see the newly elected president of Birmingham Law Society take pride in the fact that he does not have a computer on his desk, you have to wonder why he feels this is such a good thing for his clients. Is this really his vision for the future, or simply a hankering to keep past methods that make him feel comfortable?
Those of us who are looking towards the future of the legal market are starting to see a rather different picture emerging. There will be greater focus on the needs of the client – and the potential client – rather than operating in a way that suits the service provider. The move towards innovation in business models, distribution strategies and technology will help to bridge the substantial gap between law firms and the client base.
Will we ever be loved? That may be stretching it a bit. But it will be a good start if we can become better understood, more respected and – perhaps most importantly for those in practice – used more frequently.
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