Keeping it consistent with the last three posts, we are looking for ways to meet new market demands within three common components of a law firm: administration, communication and services. Let’s take a look at the services we’re selling. How do they look and feel? What’s the customer see when they look at your ad? More importantly, if you’re selling a Ford for what the Lincoln costs – how will that structure hold up in the future?
Did you know it takes six months to build a Rolls Royce and about 13 hours to build a Toyota? Where does quality intersect quantity and how does it affect your bottom line? You’ve heard it before but I’ll say it again – ask your friends who makes the very best hamburger in the world. Next, ask them who sells the most hamburgers in the world (it’s McDonald’s). Now don’t get me wrong, I’m not telling you to put out a bad product. I’m asking you – where you think quantity, quality and margins intersect with total profitability? In an increasingly globalized industry how do you change your legal services in a way that keeps you competitive?
Well there are two things that are going to affect how much money you make this year: the service model by which you facilitate your product (whether you choose to be Rolls Royce or Toyota) and the product itself (its retail price less all manufacturing costs – your margin). This week we’ll look at the end product.
Let’s say one of those products is a Last Will and Testament. You meet with the client who was twenty minutes late (non-billable), make small talk for ten minutes, you have the client fill out the form which takes ten minutes, you then go to your MS Word document and begin editing the document by hand for another ten minutes. Save, Print Preview, proof read and Print – another five minutes. Now you take your client’s credit card and process the payment – another five minutes. Done.
This process just took you an hour – 40 minutes of which you billed – and at my attorney’s billable rate of $155/hour – the total cost of the Last Will and Testament is $104. Now hopefully you do a lot of those and hopefully that $104 has enough margin to help offset the costs of your client being late as well as all of the other costs associated with running a business. More importantly, hopefully your client thinks that ten minutes of small talk is worth $25 because they could have got the same thing for $79 on LegalZoom. Maybe it’s time we looked for ways to compete better. How can we mass produce these things better, while offering a lower price, all the while maintaining personalized service (your only competitive advantage over LegalZoom)? One of those answers is found in the assembly line. Look at this example:
From 1923 to 1929 Henry Ford doubled his production of the Model T while reducing its retail price by 40%. He did this by, among other things, streamlining the assembly line process. Why not streamline your assembly line?
How about an online portal where your clients enter their information and pay for the will? You can then have them elect to come in person to pick it up or you can email via PDF. That way they have the option of personalized service (time to say “hi” to you when they come to pick it up) while saving you ten minutes for client information entry, eight minutes for document editing and ten minutes for proof reading and receiving payment – a total savings of 28 billable minutes (not to mention the twenty minutes you saved because they didn’t show up late this time). Guess what? You just increased your margin by $72 for less than an hour’s work. Now you can lower that price of yours to compete with LegalZoom and start gaining market share instead of giving it up.
Why not be the first person your market thinks of when they want a high quality and low-cost Last Will and Testament? Just because none of your competitors have done it doesn’t mean it’s not possible – by that logic we might not have the combustion engine.
You can start today – or just keep reading Legal Loudspeaker.