It may be time for law firms to “productize” their offerings, the way that other professional services organizations began doing many years ago. I’m not talking about the better packaging of existing legal offerings, but rather the development of entire new field of law firm endeavor. I say this because:
– buyers already are engaging lawyers to provide detailed explanations of how they will proceed
– buyers already are demanding that lawyers produce outcomes (not just effort)
– buyers already demand fixed pricing, or at least price clarity based on outcome
– buyers already view the services of all potential providers as an a la carte menue
So, in a sense, buyers are themselves calling for legal products — a notion that was confirmed to me in a meeting with the General Counsel of a multinational hospitality company who, in speaking of the Association of Corporate Counsel’s Value Challenge, said — unprompted — “Legal services need to be products.” Res Ipsa Loquitur!
I know of no pristine definition of the phrase “legal product,” but my experiences at large accounting firms provide insights. For instance, State & Local tax accountants designed a technologically driven, replicable process for reviewing sales tax receipts to find instances of overpayment, and then to file for and capture refunds. A more exotic version of a tax product was found in the sophisticated restructuring (no longer lawful) of multinational companies to decrease worldwide tax burdens – the so called “black boxes” of the 1990s. Despite the sophistication and enormity of the exercise, in essence the tax accountants simply were repeating a process involving the interplay of different countries’ tax codes to produce a new structure that yielded the deliverable – a measurable, verifiable decrease in global tax.
For the professional services marketer or salesperson, the existence of products is a godsend, because it facilitates precise descriptions of features and benefits, as opposed to the undifferentiated blather that comprises traditional law firm sales pitches — pitches that feature unsupportable claims about quality, service and comparative price advantages.
In my experience, the best professional services products have a number of attributes that line up well with the traditional 4 P’s of marketing: product, price, promotion, position.
The best professional services products are, well, product-like. Here’s a relevant definition of “product” from BusinessDictionary.com: “Good idea, method, information, object, service, etc. that is the end result of a process and serves as a need- or want-satisfier. It is usually a bundle of tangible and intangible attributes (benefits, features, functions, uses) that a seller offers to a buyer for purchase.” Beyond that, the best legal products are those that result in a revenue-generating deliverable, for instance tax refunds or marketable environmental credits. As the concept of legal products unfolds, lawyers and their professional staff colleagues need to do some serious contemplation about potentially new sources of client revenue and how legal skills can be applied to to tap into those sources.
The best professional services products are priceable. If a process is replicable, then it is relatively easy to understand the cost (time and resources) of an engagement, and therefore to accurately price it. Buyers will determine for themselves whether or not they will pay the price, but at the very least the product approach provides pricing certainty to both the buyers and the sellers.
The best professional services products are promoteable, which is to say it is easy to describe their features, benefits and pricetag.
The best professional services products are positionable. For consumer products, position often refers to shelf position in a retail store, but for intangible products, I refer rather to a product’s position in the mind of the buyer — demonstrably better, faster, cheaper, more thorough, whatever. Unlike traditional law firm sales pitches, the claims made with respect to products are demonstrable.
No doubt, many lawyers will be able to survive and thrive for an extended time based on the still-dominant IDIQ* service and pricing model. But the increasing sophistication on the part of buyers cries out for increasing sophistication on the part of sellers through more-scientific techniques such as product development.
*IDIQ is a term from the government contacting arena. It stands for “Indefinite delivery/indefinite quantity.”