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Marketing Legal Services OnLine
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Click Here. Introduction
The Market for Consumer Legal Services
Why Do Consumers Look for Alternatives to
Lawyers?
What
Do Consumers Want?
The
"Connected" Generation
How Do You Build an eLawyering Practice?
Productizing Legal Services
Marketing eLawyering Services
Introduction
It is no secret that the legal profession is highly stratified.
Large law firms serve large corporate clients. Solos and small law
firms serve consumers and small business. These are two different
worlds. Marketing the services of large law firms is very different
than marketing the services of solos and small law firms.
By and large, large law firms compete for a finite number of large
corporate clients, whereas the markets for consumer legal services
are constantly shifting, with some markets contracting (e.g.,
Chapter 7 Bankruptcy) while other markets are expanding (e.g.
immigration). Consumer markets can be segmented by practice area and
also by client demographics. For example, one specialist in divorce
law may serve primarily a middle-class clientele community, and
another divorce practitioner may serve very wealthy clients with
millions of dollars in assets. Yet, a large proportion of the
consumer market remains underserved by the legal profession because
of affordability and access issues.
This paper focuses on marketing on-line legal services to consumers
and small business, as distinguished from marketing the legal
services of larger law firms that serve primarily corporate clients.
There is an overlap in approaches and methods between these two
sectors of the legal profession. What I have to say will benefit
lawyers from both larger law firms and smaller law firms, but our
present work focuses on delivering legal services to consumers and
small business. This is what we know most about.
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The market for consumer legal solutions is changing in fundamental
ways, primarily because of the ascendancy of the Internet. We have
estimated that there is a huge latent market for legal services –
approximately $20 billion annually - that is currently not served by
the legal profession.
During the last seven years we have seen the emergence of a new
category of non-lawyer - legal information web sites that offer very
low-cost solutions directly to the consumer. The legal information
industry of self-help books/forms has gone on-line. It has the solo
and small law firm segment of the legal profession squarely in its
sights. A legal information solution can often substitute for the
professional service of an attorney. This is the new reality that
the legal profession now faces.
During the past five years, literally hundreds of legal information
websites have emerged offering services in the area of wills,
divorce, adoption, bankruptcy, business incorporations, child
support enforcement, living trust creation, debt counseling,
immigration, trademark search, copyright registration, patent
registration, and landlord-tenant law. These sites offer web-enabled
legal forms, legal information services, advisory systems, law
guides, frequently asked question guides, and other tools for legal
problem resolution, short of delivering what could be called “full
legal services”.
These new alternatives are capturing or acquiring clients from both
the “latent market for legal services” and from existing law firms.
The impact of these legal information web sites on the legal
profession is significant. In one area alone, no-fault divorce, we
estimate that sites, such as
completecase.com,
legalzoom.com,
selfdivorce.com
divorcelawinfo.com, [Our own
affiliated legal forms company ],
divorcenet.com,
docupro.net,
and
uslegalforms.com,
have processed more than 50,000 on-line divorces in the past 18
months. If the normal legal fee for an uncontested, no-fault divorce
is approximately $1,500, then approximately $75,000,000 in legal
fees has just been drained from lawyers’ practices on a nationwide
basis. This not a small amount and will increase, at the expense of
the legal profession. These legal information sites will become more
sophisticated and incorporate more rule-based and intelligent web
applications that substitute for the judgment and the labor of an
attorney.
Crafting marketing strategies for law firms that serve consumers and
small businesses requires a deeper understanding of what consumers
want and why consumers are seeking out these alternatives to
lawyers.
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Why Do Consumers Look for Alternatives to
Lawyers?
Our research shows that consumers will avoid using a lawyer unless
they really have to for the following, major reasons:
- Consumers cannot afford lawyers at $125-$150 per hour.
- Consumers do not trust lawyers to always represent their best interests, despite what the canons of ethics require.
- Lawyers are inconvenient and inefficient to use.
- Consumers dislike hourly rates.
- Consumers perceive lawyers as high risk in terms of outcomes and cost/benefit.
Rather than seek legal assistance, many consumers will search for a
solution that is “good enough.” Consumers will sub-optimize and seek
the assistance of an independent paralegal, for example, rather than
the full services of an attorney in the interest of economy.
Although it may not be the perfect solution, it is “good enough.”
Very little market research data exists on the opinions of US
consumers and their view of the legal profession. For good, in-depth
research on this issue one has to turn to the United Kingdom. In
that country, an organization called Which?, the largest consumer
organization in Europe and the equivalent of our Consumer’s Union,
has extensively studied consumers’ opinion of lawyers. Their most
recent findings are that:
- 29% of consumers reported that legal services were poor value for their money.
- 23% said that their solicitor did not listen to their opinion.
- 30% did not feel well informed about charges.
- 40% said that despite being unhappy with the service, there was no point in complaining because the Law Society would not do anything any way.
- 63% think it would be a good idea to get legal services at supermarkets or retail banking institutions.
It is for these and other reasons that the United Kingdom is in the
process of de-regulating the legal profession in the interest of
promoting greater consumer choice and introducing modern methods of
management, greater technology, and capital into the delivery of
legal services. Sometime in 2007 these reforms will take effect.
These reforms include:
- Independent regulation through a Legal Services Board that is not dominated by the legal profession;
- Complaints handled by a new independent Office for Legal Complaints;
- The authorization of Alternative business structures which would permit non-lawyer entities to invest in and develop law firms and create new legal service delivery structures;
- Abolition on the prohibition on splitting fees with non-law firms in order to encourage more innovative marketing arrangements; and
- Narrowing of the prohibition against unauthorized practice of law which will enable non-lawyers in many areas to provide legal advice and create legal documents for consumers.
It will be a long time, if ever, before these kinds of reforms will
happen in the US, but it will be interesting to see what happens in
the United Kingdom during the next few years as these reforms take
hold. The US legal profession can learn from the experiments that
are being carried out in the UK, and the impact of these experiments
on consumer choices.
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What
Do Consumers Want? Which? has also done extensive research on what consumers want from
their lawyers. The dominant theme is better customer service. More
particularly, consumers want:
- To know what their case is going to cost;
- To know how long will their case take?
- To receive progress updates on their cases;
- To receive prompt response to letters and phone calls;
- To have complaints responded to promptly.
Which? also reports that consumers want legal advice and legal
services to be delivered:
- Online, by phone, or even by text;
- Outside the traditional 9:00 to 5:00 hours;
- Linked with related services, such as the purchase of a home;
- Together with unbundled and DIY legal services.
These findings mirror some of our own market research in the United
States. Consumers of legal services in the UK are not much different
from consumers in the US, so there is much to be learned from this
research.
From the consumer’s perspective, the system for delivering legal
services needs to be re-designed to create a new value proposition.
This new value proposition could involve elimination of the need to
go to the lawyer’s office, increasing the speed of the transaction,
and offering services at a flat fee. It is a waste of marketing
dollars to advertise traditional legal services to consumers when
that is not what they want. Marketing is more than just “selling” or
getting the word out about your law firm. It is more than publishing
a web site that is little more than an online brochure. It is more
than radio and TV commercials that make claims about what a great
law firm you are. You cannot sell a product or service to a consumer
if they do not want to buy it. Marketing is more than “promotion.” I
believe that fixing the system for the delivery of common legal
services requires more radical changes if the migration of consumers
towards less valued alternatives is to be stopped. These include:
- Increasing the transparency of the transaction between client and lawyer by moving away from hourly pricing towards fixed pricing and pricing by result. The lack of transparency in lawyer pricing creates tremendous anxiety on the part of consumers. A consumer can get a fixed price from a homebuilder to build a $1,000,000 house (with allowances for unforeseen circumstances), but cannot get a fixed price from a lawyer for a relatively simple divorce.
- Increasing productivity of the legal transaction and passing the savings on to the client. Consumers suspect that lawyers are using information technology to increase their productivity by automating more routine legal tasks such as document production. They resent the fact that productivity enhancements are not passed along to the consumer in terms of lower prices. Without competition from other kinds of providers, the legal profession has no incentive to lower prices. Instead, legal fees tend to move up over time. However, this competition is on the horizon. Full service stockbrokers were impacted by online discount stockbrokers in terms of price reductions. A competitive economic environment for legal services would have the same result.
- Making it more convenient to communicate and work with a lawyer. While it is necessary to appear in a doctor’s office for a physical examination, it is not necessary to be physically present in a lawyer’s office in order for the law firm to do its work. Yet the prevailing mode of doing business requires that the client give up half a day of work and travel to a lawyer’s office for advice at the lawyer’s convenience, not the consumer’s.
The pressures to change the patterns of delivery of legal services
for consumers will increase dramatically in the next few years, as a
“connected generation” comes of age.
The trends that are now in place will accelerate over the coming
years as “the connected generation” comes of age and begins to need
legal services. The “connected generation” includes those born since
1970. It is this generation that looks to the Internet first, before
checking the Yellow Pages, reaching for a telephone, or consulting
with a professional face-to-face.
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The
"Connected" Generation
The size of Generation Y, those born between 1970 and 1986, in the
United States is approximately 76 million. Coming right behind this
generation is the Internet Generation, or “iGeneration” which
includes those born since the mid-to-late 1990s. This generation
grew up during the birth and rise of the Internet. Thus, the
Internet Generation has no memory of (or nostalgia for) a
pre-Internet history, a factor which greatly differentiates them
from older generations, who had to learn to adapt to 'new'
technologies. The iGeneration simply takes the Internet for granted
as 'natural,' with sites launched since 1998 such as MySpace,
YouTube, iFilm, and the ever-growing use of Internet Forums,
Wikipedia and Goole as part of its global cultural ecosystem.
Connected consumers value:
- Innovation – the better way;
- Immediacy- e.g., I want it now;
- Authentication and Trust;
- Interactivity;
- High customization: services and products that fit unique needs.
Consumer behaviors emphasize:
- Looking to the Net as the first place to go for information, alternatives, and options;
- Using comparison sites;
- Trying before Buying;
- Looking for interactive digital spaces and communities of interest where opinions and information can be exchanged;
- Interacting with a web site before talking to a professional;
The “connected generation” want to do business over the Internet
with attorneys and understand elawyering concepts. Eventually,
consultation with a professional may occur, but only after this
digital exploration.
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The first step in creating an eLawyering practice, is to build a
“strategy map” which identifies who and where your existing and
potential clients are and how you can serve them more effectively
over the Internet. A highly localized and neighborhood-based
practice serving lower income families may find that the Internet is
less relevant to its client base. On the other hand, a law firm that
serves small business in a specialty area such as intellectual
property, immigration, or employment law and is seeking to expand
its practice from a single city to statewide will find the Internet
very relevant indeed.
Time, pricing, the degree of required emotional handholding,
convenience, unbundling, the degree of specialization that is
required, and whether the transaction lends itself to self-help
approaches, are all factors that need to be taken into account in
creating a strategy map for the law firm that wishes to develop an
eLawyering dimension to their practice.
In order to develop a competitive strategy., you have to think like
a disrupter. If you closely analyze companies like Southwest
Airlines, the University of Phoenix, and Wal-Mart, you will see that
their growth follows a common pattern. Each of these companies
started with a solution that made it easier, simpler and more
affordable for customers to solve a critical problem in their lives.
Each of these companies then identified a group of customers that
typical suppliers in the industry considered insignificant and each
of these companies adopted an approach that made it difficult for
traditional suppliers to respond.
As Clayton M. Christenson points out, when Sony entered the consumer
electronics market, it did not compete with the leading tabletop
radio providers by making better radios. Instead, it introduced a
portable and inexpensive transistor radio that was designed for
teenagers who wanted to listen to ball games or music without being
supervised by parents. When Apple introduced the iPod, it did not
compete with the Sony Walkman. Instead, it created a unique platform
so that this same demographic could carry around their music
libraries in their pocket.
The lesson here is that non-clients of your law firm can become
great clients if you figure how to reach them with an alternative
offering that really meets their needs. Sometimes the best target
customers or clients are those that lack the skills, wealth, success
or time to consume traditional legal products or services. Removing
barriers to consumption can be a pathway to growth.
Once you figure out what kinds of clients you want and how you will
serve them, you can translate the strategy into a web site
development plan. This Plan will estimate investment costs,
revenues, and the intangible benefits that result from the creation
of a web-based legal service delivery system for your firm.
Many law firms have what could be called “first generation” web
sites that consist of little more than an expanded yellow-page
advertisement. A much smaller number of law firms have “second
generation” web sites that provide rich substantive content and
legal information.
Finally, an even smaller number of law firms actually provide
applications that help clients solve their legal problems over the
Net in a satisfying and price-competitive way. These include
legaladviceline.com,
mdbankruptcylaw.com,
visanow.com,
mdfamilylawyer.com,
and
illinoisdivorce.com,
to name a few. These are all examples of true elawyering web sites
that offer legal solutions directly to middle-income consumers.
We would not consider a law firm that has a first generation web
site, as defined above, as one that is engaged in eLawyering. These
sites do not have any interactive applications and are little more
than brochures in digital format. Often these sites exist within a
larger law firm directory and the firm has no control or access to
the web site itself in order to be able to add interactive
applications. For these law firms, the Internet is no more than
another media channel for communicating about the law firm’s
capabilities. They are not “interactive service” sites. For these
firms, law practice is business as usual.
On the other hand, a law firm web site that is based on eLawyering
concepts involves moving beyond site that contains only legal
content to one that helps clients collaborate with their lawyer and
do legal tasks over the Internet. The impact of these web based,
interactive applications is to save lawyer time, and often increase
lawyer productivity and profit margins, while providing a more
satisfying experience for the client.
The law firms that are moving into this next stage are what we call
“web-enabled law firms” because of their commitment to use the power
of the Internet to change the way they practice law by creating web
sites that are highly interactive with their clients.
For these law firms, the web site becomes the primary way in which
the law firm relates to its clients and manages the flow of legal
work. To accomplish this objective, a web-enabled law firm could
consider using the following applications:
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Productizing a legal service means systemizing the production of the
service, rather than custom crafting the service every time you
produce it. Often this means integrating a digital application with
the production of the legal service.
Here is an example of productizing a legal service using web-enabled
document automation tools.
We run a virtual law firm in Maryland from the web address
http://www.mdfamilylawyer.com . We
specialize in helping parties in family law represent themselves in
routine divorce matters. We offer legal forms bundled with legal
advice for a fixed price. When a client enters their secure client
space they have the option of completing an online questionnaire for
a Marital Separation Agreement and a set of divorce pleadings. When
the client is finished entering into their information, all of the
documents are instantly created as a first draft ready for review. A
paralegal on our staff reviews the documents and emails the client
if there is a need for additional information. By the time I get the
documents they are 90% complete and ready for sign off. If I have to
do custom drafting I do it at that point, after entering into an
email dialogue with the client. Our selling price for a divorce
package is $299. On average, we spend 20 minutes per transaction. My
paralegals and the digital application do most of the work. Our
operating profit margin for this unit of service is approximately
80%. One can apply the same principles to other areas of law
practice.
Creating automated document templates that work on the web is not a
trivial undertaking. All of the major document automation systems
require some scripting language skills. If the firm has already
automated documents that have been used on the desktop the task of
importing these documents for use on the web is made much easier.
Rapidocs already has large inventories of state-specific legal
automated documents, which can often be used with minor adjustment.
These document templates can be used to generate first drafts, which
are then further customized by the attorney.
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Finally, you do have to market the features of your eLawyering
practice. Add information to your home page about your new web
site’s functions and how client’s can take advantage of the new
functionality. Advertise your new capability as a way that your law
firm does business differently over the Internet. These efforts will
attract a clientele that prefers to do business over the Internet.
Participate in on-line lawyer directories that will publish a link
to your new web site.
The web is an interactive medium. What distinguishes a law practice
based on eLawyering concepts is an interactive platform that
involves clients with the actual legal work of the firm.
Interactivity with clients is the true marker for what constitutes
eLawyering in the law firm of the future.
Figuring out how to incorporate these newer “interactive
technologies” into law firm business models will be both a challenge
and opportunity for law firms, particularly those that offer
personal legal services to the middle class. Initial efforts are
promising that the legal profession will rise to the challenge of
offering legal services on the Web.
The future belongs to law firms that learn how to use Internet
technology to disrupt their competition by offering a client
experience that is both low cost and of high quality. |
Copyright © 2010, Richard S. Granat
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