Appealing to clients' emotional needs

Small and medium sized law firms do have a future in the Tesco Law world – but only if they reinvent themselves, and give clients an “emotional” reason to instruct them, according to leading futurist Dr Patrick Dixon.

Dr Dixon, once described as one of the 20 most influential business thinkers alive by Thinkers 50 says that “emotions” drive every area of life, from the future of Greece in the Euro to the continued survival of Nokia. “And, if the future’s about emotion, then lawyers’ futures are about trust, because that is the only commodity you have to sell,” he told delegates at legal network LawNet’s conference last month. “Clients want to see you as their prized advisor, whether you’re sorting out a messy divorce or structuring the affairs of a family-owned business.”

For Dr Dixon, one key way in which law firms could appeal to customers’ emotional needs, and help develop trust, was to improve basic customer service issues – such as allowing clients to engage with them far quicker than many do now. “Up to 80 per cent of any company’s business can be lost if their website takes more than 10 seconds to load,” he said. “Tomorrow, that will be five seconds.” Recalling that his own grown-up children live in what he called a “zap zap world” of Facebook and SMS messaging, he said they “could not even begin to get their heads round” the speed at which some law firms operated, when both encountered the legal system when buying their own homes.

One way he said he has been able to ensure that he was accessible to his own customers, 24 hours per day and 365 days per year, was to “have less of them and charge them more”. And, to help ensure he was able to respond promptly to those select clients, technology could also play a part, he said. Revealing that he used software which converted voicemails to SMS messages, he recommended that all lawyers buy such software “immediately”.

“What happens if your most important client, who might bring in 20 per cent of your firm’s entire revenue, leaves a message for you at work when you’re away for a half-day at a client meeting?” he asked. “All you know is that you’ve got a missed call from them – which could be about anything. With voicemail SMS messaging, I can constantly monitor the messages being left on my voicemails wherever I am – and can even forward the message on to one of my colleagues if I’m not able to respond myself. This is just one of many simple ways in which lawyers can cut down their response times to clients from hours to minutes – and it costs nothing.”

For law firms unconvinced by or unable to embrace 24/7 availability, Dr Dixon said that many alternative service providers were quite willing to do so. He pointed to online services such as justanswers.com which could provide an initial response to a legal query within seconds, typically by charging a few pounds per go. Lawyers might wonder why any of their peers would want to “engage in this type of stuff” – to which he responded: “Why not? It’s fun, and you can even do it when you’re at home with the kids.” He then asked how many lawyers present at the meeting could provide clients with a sensible answer to their legal questions within five minutes – even an hour. “The future is about speed, access and friendliness.” Complex problems ?don’t have to be solved instantly, he added – but conversations should be capable of being started promptly, using whatever form of communication clients felt comfortable with.

Fresh investors

Dr Dixon also highlighted an important lesson that could be learned from other industries – “if a process can be done more than twice, it can probably be automated” – and the legal market was no exception. He highlighted websites such as LegalZoom, Cybersettle and Divorce Online, which can now replicate much of what lawyers do – but typically on a fixed-fee, or low-cost, basis. These automated providers could offer such legal services at little or no cost, because their only continuing overhead was “the price of the electricity to run another mathematical cycle on a PC”. The flip side of this low-cost service offering was that clients typically had to carry out much of the preliminary work themselves, he added, such as completing online forms.

He was also dismissive about the billable hour in the future of law firm charging structures. “Paying by the hour is such a last century idea,” he said. “It really is. No one wants to pay by the hour – they want a deal. ‘How much will this merger cost me?’ ‘How much to buy my house, or re-organise my business?’ Customers want a fixed price deal, with no variation.”

Taken together, the need for traditional law firms to increase their client response rates, automate much of what they do, and offer a fixed price for their services may leave some wondering how they could make money out of this brave new world. However, Dr Dixon suggested that this fear largely depended on what type of legal practice lawyers currently worked for. He pointed to investors such as Duke Street Capital and Quindell Portfolio, who had recently poured millions of pounds into existing law firms – all with the intention of generating a return on their investment. “Existing legal firms may be worried, ?but new investors see the legal market as ?a fantastic money spinner – which tells ?me that opportunities must be available,” he said.

What’s more, he added, the amount of money generated by the rapidly-developing legal process offshoring (LPO) market was also booming. Quoting recent figures from Forrester Research, he said: “LPO work moving to India is already generating around US$650m per year – but could be worth up to US$4bn by 2015.”

Emotional ties

Although Dr Dixon encouraged the mid-market law firms in the audience to embrace the working practices of these new-style competitors he also suggested how they could successfully differentiate themselves from them. Crucially, his recommendations drew on the central theme of his presentation – how to make intelligent use of “emotion” to allow law firms to continue to prosper.

Citing research, which found that 90 per cent of 30-40 year-olds wanted to leave conventional jobs, and that six out of 10 see no reason to get out of bed in the morning except to make money, Dr Dixon suggested that small and medium sized law firms were well-placed to benefit from this generational disillusionment with the corporate rat race. “Many talented lawyers become completely fed up with the firms that trained them, because they dislike its highly toxic, testosterone-driven culture,” he said. “They want to have choices, and control of their lives.”

And, fortunately for mid-size firms, many of these talented lawyers have ended up in firms such as theirs, he added. Smaller, flexible, more family-orientated law firms have a unique selling point, he suggested, which no amount of money offered by rival practices can detract from. Members of law firms who recognise that their team have lives beyond their firm will, he added, “be committed to you for life. They won’t go anywhere else – even if they were offered the chance to earn 50 per cent more money.”

In relation to the type of advice that law firms should offer clients, Dr Dixon highlighted the self-evident truth that legal rules change frequently, often in response to changing public sentiment. Consequently, lawyers who simply helped companies to comply with existing statutory rules may not be doing enough to protect their clients’ long-term reputations, he argued.

Instead, Dr Dixon recommended that lawyers should be able to offer advice to their clients which went beyond what he called “bog standard advice”. This type of personalised service, he argued, which can only be delivered with an intimate understanding of a client’s own situation, would be “priceless to them” – and would help them to survive in the offshored, commoditised, multi-channel world of ?legal services, which is rapidly, and irreversibly, emerging.

 

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Getting emotional 

Ann Davies, managing partner, Lamb Brooks

 "It has reminded us that we needed to be client focused  but also take care of our own staff. We need to be aware that many employees have complicated family situations, and so need a degree of flexibility in how they work. What he said about the need for firms to respond quickly to clients was also very important, and its an issue Ill certainly be following up on. As a firm, I think Lamb Brooks is already pretty good, but Dr Dixon gave some useful tips about small things we could do to make our response times even quicker."

Brian Harrington, head of employment, Denison Till

“The challenges that all firms face – such as how to deal with employees’ work life balance needs – can become opportunities, if dealt with correctly. By acknowledging that some employees will have difficult issues to deal with outside of work and, where possible helping those employees by offering flexibility and understanding, employers can build a loyal and dedicated workforce.”