Gold, Silver And Bronze: Staying Ahead Of The Game

I have read rather a lot recently about commoditisation and problem solving. As I understand it, the argument goes something like this:

• Law firms can solve Clients' legal problems by embracing IT to help standardise and streamline their processes.
• Furthermore, practices should implement such systems now before the initiative is lost to the more commercially minded, scaled up competitors that alternative business structures will inevitably bring.

I certainly agree that the Internet is a "great leveller" for small and medium sized firms, providing access to markets and opportunities previously enjoyed exclusively by larger organisations. A Sole Practitioner's website can, in theory, reach out to the same audience and offer similar services (online at least) to a top City firm, especially in conjunction with Case Management and Document Production Systems and the outsourcing of secretarial and other key processes.

However, for me, the success or otherwise of such an approach depends on a number of factors, including:

1. Your Client base, in terms of location and demographics, for example.
2. The type/s of service/s your Clients want, be it "off the shelf" legal documents or bespoke advice and assistance etc.

For those firms that have an eclectic mix of Clients with different needs, how about adapting your services accordingly? For example, for IT savvy, cost conscious, non-centric Clients offer them a basic, "packaged" product similar to that advocated above? Similarly, deliver a personal, bespoke service to those local Clients demanding just that. Finally, for those Clients somewhere in between, give them the best of both-a mainly automated service, but with some human interaction for peace of mind. The level of service will then dictate the price. I have touched on this idea in previous posts (see "Conveyancing Factories": Can Solicitors Compete?).

Clients are accustomed to making such choices. One example that immediately springs to mind is insurance. Coverage is commonly labelled "gold", "silver" and bronze".

So how do you apply this principle to legal services? Whilst it perhaps lends itself more to work of a transactional nature, I believe that, in most areas of law, the method of delivery and/or the extent of involvement, can be tailored to meet the Client's needs. Here are just a few examples:

Wills and other documents

There will no doubt be some people who simply want a basic template that can (depending on the firm's capabilities) either be downloaded and completed in accordance with the accompanying notes or (even better) compiled online. In both cases, no help is required.

Others may want to go a little bit further and have the reassurance of a fee earner check the completed document to ensure that it is valid (but not advise as to its suitability/fitness for purpose).

Some Clients may be looking for a bespoke document to be prepared from scratch, based on their own individual circumstances, following a face to face meeting and specialist advice and assistance.

Conveyancing

Some will want the bare minimum, namely legal completion of their transaction. They desire a stripped down service, only paying for what is absolutely essential. They expect to be charged less if there is no Mortgage to redeem and/or register. Similarly, they will save money by completing and submitting the Land Transaction Return themselves. Given email and online case tracking, they also consider postage and telephone calls to be "added extras" and want to retain some control over the associated costs.

Other people will want the certainty of a fixed fee to cover everything, apart perhaps from the risk of the chain collapsing.

Finally, there will be those Clients who prefer the comfort of a "no move, no fee" guarantee and are prepared to pay for the privilege.

Probate

Depending on how complex the circumstances, Clients may just need a Grant of Probate/Letters of Administration. Possibly, a guide and links to the relevant forms is all that is required

Others may want you to obtain a Grant/Letters and also handle the sale of the deceased's property.

Some people may, in addition, require advice and assistance in relation to the actual administration of the estate.

Divorce

Some Clients act in person, possibly seeking ad-hoc advice. Again, a guide/links may well suffice, otherwise fixed fee web chats may be the answer.

Others may want you to deal with an undefended Petition, but not to get involved with any children or ancillary relief matters.

Then there are those who require advice and assistance regarding all aspects of their marital breakdown.

Litigation

As with divorce, there may be those who just want some initial advice or a Letter Before Action sent to the other party. In the latter case, the Client may be able to adapt a precedent available through your website (a debt collection matter, for example).

Again, some unrepresented Clients may need help as and when required.

At the other end of the spectrum, there will be those who instruct you to act from start to finish. Although all cases are different, there are those (Small Claims, for example) where the likely work can be assessed at the outset and thus justify a fixed fee.

The most important point is to understand exactly what it is your Clients want and how they want it delivered. Once you have done this, you can develop and adapt your services to meet their differing needs.

What do you think?

Do Solicitors Get A Raw Deal?

A fortnight ago, my family and I visited our new Dental Surgery for the first time. On arrival, we all had to complete a Registration Form and then took it in turns to see the Dentist, who introduced himself. My wife and I needed some follow up treatment, so we arranged another appointment and my wife was asked to pay a deposit towards its cost (which had already been explained to us). Apart from a Receipt, no further paperwork was forthcoming. We returned last week, had the work done (which wasn't too bad thanks) and paid the balance. Again, only a Receipt was given.

Now don't get me wrong. I'm sure you're all more or less familiar with this scenario. After all, it seems, certainly from my own experience of other Surgeries and Chiropractors etc. at least, that this is the norm: let the Patient provide the required information, take immediate credit/debit card payments, handover a Receipt and that's it. However, being a Solicitor, I couldn't help but compare this experience with that of my own Clients. Here's what I would have had to do in similar circumstances:

1. If possible, I would have provided some basic costs and other information before the first meeting to ensure that there were no misunderstandings, especially concerning the scope, time limit and cost of the interview.
2. In any case, I would have supplied a detailed Client Care Letter compliant not just with the Solicitors Code of Conduct, but the myriad of other rules and regulations to which we are subject, and asked the Clients to sign, date and return a copy. Again, this would, ideally, have take place prior to the initial meeting (to the extent that I could have satisfied the rules and regulations at that stage with any outstanding information etc. following as soon as possible). As part and parcel of this, I would have had to agree a level of service and spell out our respective responsibilities, not only my name and status, but that of any supervisor, the basis and terms of my charges, my complaints procedure and possibly my Professional Indemnity Insurance coverage.
3. Prior to accepting any payment, I would have had to consider the operation of the Money Laundering Regulations and, where appropriate, obtain and copy satisfactory evidence of the Clients' names and address and perform an electronic check to ensure that they were not politically exposed persons etc.
4. Following the meeting, as well as confirming any outstanding costs and other information, I would (amongst other things) have had to write to identify the Clients' objectives, explain the issues involved and the options available and agree the next steps to be taken. This would have been repeated, arguably after each and every attendance.

I'm sure I've missed some items off this list, but, even as it stands, it looks much more cumbersome and onerous than the Dentist's.

Do the vast swathes of paper and information sent to my Clients make for a more fulfilling experience? Are such Clients better protected and more informed than other members of the public? If the answer to these and other similar questions is "yes", why should this be so when healthcare professionals are, after all, dealing with people's physical wellbeing, where the risks and potential consequences are, in some cases, arguably much more serious/grave? Furthermore, why are unregulated "Legal Consultants" and "Will Writers", sometimes providing identical services, not scrutinised in the same way? Should the "act" not override the "actor"? What about Accountants, Estate Agents and Surveyors? Why are they treated any differently? If, on the other hand, the answers are "no", why do Solicitors find themselves in such an unenviable and, on its face, unfair position? Have their regulatory bodies not been as robust as others?

I suppose the upshot is this: does the (over) regulation of Solicitors help or hinder the profession and its Clients? I think I know the answer, but what do you think?

If You Build It They Will Come

I have just read Lawyer Locator's white paper entitled "The Future of Small Law Firms".

Some of its findings are, perhaps, rather surprising and somewhat out of kilter with other research and empirical evidence. For example, according to the associated consumer (their word not mine) poll, only 1% of people use search engines to choose a lawyer (75% less than those apparently using a telephone directory!). Compare this to the 26% revealed by a Solicitors Regulation Authority survey in 2008. My own experience suggests that this latter figure is much more accurate and, as the paper readily accepts, is a trend which can only be expected to grow. The other main sources of work are recommendations from family and friends (28% and 24% respectively) and having local offices (22%).

As part of the poll, respondents were also asked to identify the three qualities that are most important when choosing a lawyer. The results are:

60% Specialist knowledge of the legal issues involved
60% Approachable and able to explain the issues involved
49% Cost
29% Ease of getting in touch
28% Proximity to where they live or work
23% Knows my personal history
11% Good local knowledge

I argued in a previous post that legal knowledge is more or less a given. If say you advertise family law services, the vast majority of clients will, rightly or wrongly, assume that both the firm and the individual fee earner are specialists in that particular field. If they were aware of negative comments made by former/existing clients, they probably would not have approached the firm/fee earner in the first place.

Proximity and local knowledge are also matters of fact. The offices are either near the potential client or they are not and it should follow that the firm knows about its surroundings.

Looking at the remaining factors, coupled with where the work actually comes from, the lessons small firms can learn from the paper are (in no particular order, especially given the results):

1. Friends and family will only recommend your services if you at least meet, and hopefully exceed, their expectations. This involves clearly defining at the outset of each case the exact extent of the retainer. In other words, what work you will do and not do. Likewise with your service standards or clients charter. For example, will you return telephone calls the same day, emails the following day and letters within two days? You must then do the job you promised and comply with any self imposed deadlines. Finally, at the end of the matter, you should gather honest feedback on the client's experience. Positive comments can form the basis of testimonials to garner the trust of potential new clients. Negative responses can be used to improve your services and hopefully avoid a repetition.
2. Satisfied clients should be retained. It is obviously much easier and cheaper to generate new business from such clients than prospects. Before, during and/or after the retainer, offer them another, possibly associated, service, at a special discounted price. Would they be interested in an annual "legal policy" (see my previous article on this subject). Tell them in a newsletter about changes in the law, what this means for them, what they need to do and how you can help. Similarly, you may have taken on a new fee earner or opened a new department. A former client may be moving house, but if they do not think you deal with conveyancing, they may not contact you.
3. Service standards/a clients' charter also reassure clients that you will be accessible. Make it as easy as possible by utilising email, text messages, tweets etc. Invest in your website, allowing interaction. Consider an online case tracking system, available 24/7. Stagger staff so that calls are answered outside normal opening hours and do not close for lunch. Visit clients at home or at work. What about working Saturday morning or diverting calls to mobiles when the office is closed?
4. Communicate in plain English and provide a friendly, yet professional, service. Ensure that your reception area is welcoming. For some, visiting a lawyer is feared as much as going to the dentist!
5. Be transparent regarding costs. Fix/cap fees wherever possible or be imaginative, relating costs to the value of a commercial transaction, for example.
6. Use search engine optimisation/search engine marketing to ensure that your website appears on the first page of local internet searches. Google Places is also a free tool to promote your firm, as are social media and blogs and advertorials and articles in local newspapers.
7. Differentiate yourself from other local firms. Why should clients choose your firm over the competition (I have written about this before)? If self serve document sites are an issue, does the client know that they may have no comeback if the standard document lets them down? Such unregulated sites are littered with disclaimers and cannot offer clients the protection afforded by professional indemnity insurance and the Compensation Fund, or even legal professional privilege. Isn't it worth paying that little bit extra to get the job done properly?

Above all, give the client the service that THEY want at a price THEY are willing to pay. If this is achieved, you will be well on the way to becoming that person's "local lawyer", something that 70% of respondents in the poll feel they do not have.

Solicitors Charges: Act or Actor?

For all those familiar with the BBC2 programme, "Mary Queen of Shops", the phrase "point of difference" will strike a chord. How can small, independent retailers differentiate themselves from, and compete with, the supermarkets and other so called "big boys" when price is a non starter? Descriptions such as "local", "experience", "quality" and "service" are often the key and I firmly believe that these "benefits" can be equally applied to the legal profession, especially with the imminent arrival of what has been dubbed "Tesco law". Previous posts have touched on this and will be expanded on in the future. For the time being though, I want to concentrate on one specific aspect: should Solicitors charge based on who does the work or the end result?

Take conveyancing as an example. I am buying a house and approach a local law firm. Barring any unforeseen complications, the process should be relatively standard involving a Contract, Searches, Enquiries and probably a Mortgage. However, a Partner will be handling my case from start to finish and the fees reflect their qualifications and experience. Another local practice charges less, but most aspects of the transaction are dealt with by a "Conveyancing Executive" under the supervision of a Solicitor (not necessarily a Partner). Does it really matter to me who actually performs the work? I suspect that for the vast majority of Clients, the answer is no. In my experience, Clients regard the Solicitors firm as acting for them, rather than the individual fee earner. In fact, most Clients would probably be blissfully unaware of the fee earner's status. True, such information must be given at the outset, but how many Clients absorb it in practice? So, the upshot is that, to coin a phrase from the realm of negligence, it is the act being done, rather than the actor performing it, that is key. Consequently, in this particular area of law at least, price is crucial at a local level and firms should consider charging the market rate regardless, as well as delegating routine tasks to Paralegals. This may mean additional staffing costs, but this should be offset by the increased capacity and workload.

To be honest, I think the same is true in almost all other instances where the case invariably involves a set pattern and fees can, therefore, be fixed. I am thinking of uncontested divorces, basic Wills, obtaining a Grant of Probate, Compromise Agreements and the like. The ability/capability to do the job properly is a given. If you have different levels of fee earners all practising say family law, why should one charge more than the other, unless the particular facts of the case call for their specific intellect or expertise? On the other hand, different charging rates can be justified where the amount of work involved and/or complexity are unknown and time based charging is utilised.

In summary, will the individuals qualifications and experience add real value? If yes, qualifications, experience and hourly rates are still relevant, otherwise constant fixed fees across the board, coupled with standardisation and delegation, are the answer.

How Can Solicitors Compete?

In a previous post, I suggested that most High Street conveyancing Solicitors simply cannot compete on price and should not even attempt to do so. So, how else can such firms survive in the ever changing legal marketplace? Here are just a few ideas:

1. Identify both your existing and "wish list" Clients and, in each case, determine the type/s of service they (not you) actually want and what they are willing to pay (not how much you want to charge). Unless and until you have performed this exercise, you are simply fumbling around in the dark, unable to reach your target audience with any degree of precision. It is impossible to "be all things to all people". Armed with such information, why not offer different levels of service to different Client types?

2. Differentiate your practice. What is your unique selling proposition? Why should potential Clients choose your firm over its competitors, especially if you are more expensive? How can you justify higher charges? What additional benefits do you provide and why are they important? You could, for example, emphasise that you are:

2.1 Partner led;

2.2 Qualified;

2.3 Experienced;

2.4 Regulated; and/or

2.5 Local.

Furthermore, you offer:

2.6 A personal service; and

2.7 The protection afforded by both professional indemnity insurance and the Solicitors Compensation Fund.

You may also have embraced IT.

Perhaps, you visit Clients at home or in hospital.

3. Now you know your target audience and distinguishing features, promote your own brand, rather than someone else's. Take advantage of the new opportunities created by social media and social networking.

4. Consider offering a truly fixed price, irrespective of whether it is a sale or purchase, freehold or leasehold, with or without a mortgage etc. First, research the types and values of properties in your target area. Next calculate your average fee. Practice/case management systems should help in both respects. Finally, ensure that the average fee remains competitive for the most common type/s of transactions and that the estimated loss of income related to low value transactions will at least be met by the potential increased number of higher value matters.

5. Arrange the Energy Performance Certificate and then refund its cost (about £50) if you deal with the conveyancing. A group of local firms could join together for advertising and marketing purposes and still offer Clients freedom of choice between local, quality firms. Such a proposition could also alert unsuspecting potential Clients to the alternative being advanced by third parties.

6. Offer a free Will or a discount against other legal services, especially those not provided by your competitors. Provided you meet/manage Clients' expectations, this should, over the medium to long term, produce dividends, cultivating brand loyalty. Clients will, in time, regard you as their "family Solicitor" and recommend you to others.

7. Offer Clients a referral fee or other financial incentive for all new instructions introduced by them.

Of course, with the exceptions of 4. and 5., all of these ideas are of general application.

"Conveyancing Factories": Can Solicitors Compete?

In short, the answer is, in my view, no, and law firms should not even try. Here's why.

With any type of service, quality and price are undoubtedly the main drivers influencing customers'/clients' choices. Most people believe the old adage that "you get what you pay for". Nevertheless, many buyers and sellers of property, not to mention those remortgaging their homes and/or transferring ownership, are perfectly happy to instruct the cheapest firm, wherever they may be located and regardless of the service offered. It is the end result that matters most, not how (and if!) they get there. Conveyancing is, despite the personal attachment, not to mention the financial importance of the transaction, viewed no differently to the weekly shop. Price is king.

At the other end of the spectrum, are those that desire a bespoke, personal, local service and are, if necessary, prepared to pay for the privilege. For them, the "experience" or "journey" is key.

Finally, there are those somewhere in the middle, who are simply after the best compromise that they can get. Their expectation is that both price and quality of service will be "average"; a sort of halfway house.

So, should Solicitors try to compete on price? I believe the answer, for the vast majority of High Street practices, is no, at least not entirely. Such firms are unlikely to ever reap the economies of scale enjoyed by the out of town, high volume/bulk conveyancers. For this reason, being the cheapest is simply unattainable. No matter what they do, their competitors, especially with the proposed introduction of alternative business structures (i.e. "Tesco law"), will undercut them, possibly even offering conveyancing as a loss leader to grow their brand. Even in the current market, a Google search for "cheap conveyancing solicitors" lists numerous firms offering fees "from £89" and this ignores the cost of advertising and marketing and referral fees. In any case, it is your bottom line and reputation that counts. More work does not necessarily mean higher profits at the best of times, and reducing fees is hardly going to help! The adverse consequences attaching to a loss of goodwill should not be underestimated either.

It does not follow, however, that you should not give Clients the service they actually want (not what you think they want) and adjust your pricing structure accordingly. I have commented elsewhere on how this might otherwise be achieved and will revisit this conundrum in future posts, but here are just a few ideas. You could, for example, offer different levels of service to different Client types. Another possibility, depending on the types and values of properties in your target area, could be to offer the same fixed fee, irrespective of whether it is a sale or a purchase, freehold or leasehold and with or without a mortgage etc. Simply calculate your average conveyancing fee, which case/practice management systems should readily support, and give the comfort of clear, straightforward and transparent pricing.