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3 Things All Lawyers Should Learn From LegalZoom

things-lawyers-should-learn-from-legalzoomAs an attorney, you’ve devoted much of your life to get where you are today. You went to law school and spent countless hours studying. You slaved away for months preparing for the bar exam, and you passed. You’ve worked long hard hours in practice, building up your skills, knowledge, and experience. You’re highly qualified, highly educated…an expert. Very few people have the intelligence and determination required to achieve what you’ve achieved. And for that reason, it’s easy to see why a lot of attorneys cringe at the idea of legal services becoming a commodity, but that is exactly what’s happening. Read on to find out why, and to find out about some of the things lawyers should learn from LegalZoom.

Lesson 1: Legal Services are Becoming a Commodity

According to Merriam Webster, a commodity can be defined as “a mass-produced unspecialized product.”

All that hard work and dedication, and now you are selling a mass-produced, unspecialized product? Like oranges? Or lumber? A commodity!?

It can be a tough pill to swallow. But, the practice of law is changing. Legal services are not what they used to be, and at a certain point, lawyers will have to take notice of the changes and find ways to adapt.

Below is a closer look at the commoditization of legal services, and how solos and small firms can adapt to this trend and use it to their advantage. Note that the focus is on consumer and small business legal services, a market primarily serviced by small law firms and solos.

The Internet Changed Everything

Once upon a time, lawyers would bill clients by the hour for every little bit of work. Clients would pay a monthly retainer, plus additional fees for anything beyond the scope of that retainer.

This arrangement was justified because the law was largely inaccessible to non-lawyers. Legal services were being provided behind closed doors, and unless you had the key to entry (i.e. the means to pay), you didn’t have access. If you needed legal advice, you needed to hire a lawyer. There were no alternatives.

But then came the Internet, and everything has changed.

Slowly but surely, the Internet has peeled back the curtain. The knowledge gap is closing as legal information becomes accessible to the general public. LegalZoom and other tech-based lawyer substitutes have emerged. The billable hour system has been exposed for its flaws (and sometimes its lack of ethics).

Everyone in the legal community has observed these changes taking place. But many have failed to consider the impact these changes will have on their future careers and taken steps to prepare themselves. In order to do so, it’s first important to understand the underlying forces behind commoditization.

Lesson 2: The Demands of Clients are Driving Commoditization

The Internet has broken down the barriers to accessing legal help. As a result, people increasingly believe they don’t need a lawyer to handle their legal issues. And because markets always follow the demands of customers, your potential clients are actually the ones driving the commoditization of legal services.

The reason LegalZoom has become successful is that most consumers don’t know the difference between downloading their will online and having it drafted by an attorney. They just want to feel as though their legal concerns are resolved quickly and painlessly.

Unfortunately, working with a lawyer is anything but quick and painless. Hiring a lawyer is usually a pain in the ass!

First you have to go out and find one with the right qualifications and experience. Then you have to get in touch with that person, which often requires multiple calls and emails and time spent waiting for a response. Next comes establishing the budget, which is inevitably more than you want to pay.

It can take weeks by the time you are finally signing an engagement letter, and you haven’t even started resolving your legal issues yet! Who wouldn’t prefer answering some questions online and taking care of the issue in a matter of minutes?

It’s All About the Customer Experience

Any lawyer knows he could draft a better will than a standardized LegalZoom template. But to the customer, who orders that generic will online, instantly gets an email confirmation when it’s complete, and receives it in a nice leather-bound binder, the LegalZoom will often seems superior.

The reality is that LegalZoom provides a better “customer experience” than most lawyers. And that is precisely why clients are the ones driving the commoditization of legal services – people are fed up with the “customer experience” of dealing with lawyers, so they are turning elsewhere for their legal services.

Commoditized legal services – fast, predictable, affordable – are better at delivering customers what they desire. And since markets tend to follow the demands of customers, commoditized legal services are here to stay for the foreseeable future.

Lesson 3: You Can Use “Legal Services as a Commodity” to Your Advantage 

You can’t fight commoditization. As discouraging as it may be, your years of hard work, knowledge, and practice experience are less meaningful to potential clients than they once were.

It’s time to face the facts: you are in the business of selling legal services, and the people buying legal services, AKA your customers, are demanding the attributes offered by commoditization. So, rather than resisting change or trying to ignore the impending future, focus on giving the people what they want!

How can you make your services more accessible to clients? How can you turn around work faster and improve efficiency? How can you lower your prices, increase your volume, and continue to deliver a high quality product along the way?

Before you get all defensive, stop thinking like a lawyer for one minute, and think like a business owner. The point being made here is not that you should be cranking out sub-par legal services and churning through clients as quickly as possible. What you need to do is learn from the trend of commoditization, and find ways to improve the delivery of legal services to your clients.

LegalZoom’s Weaknesses are Your Biggest Strengths

Think about your value proposition - why should a prospective client hire you, which takes twice as long and costs twice as much, instead of using LegalZoom? You know the answer to this question, but your prospective clients probably don’t.

The biggest things missing from these commoditized lawyer substitutes are customization and guidance. LegalZoom can’t possibly address the multitude of complexities that can arise in even the most routine services. But you can, and you can also offer guidance and reassurance throughout the process. That should be your selling point.

You may not be able to compete with LegalZoom on price. But, if you can provide some of the other attributes offered by commoditized legal services and effectively communicate your value proposition, you’ll give people a more compelling reason to work with you over a technology driven alternative.

The key here is to learn from the trend of commoditization rather than resisting it. Figure out how to differentiate your service offering to give your customers what they value. Get creative, and above all, forget about billing for every hour and start selling your legal services more like a commodity.

Small Law Firms and Solos Can Benefit the Most

Small firms and solos may actually be in the best position to take advantage of the trend toward commoditization.

Contrary to Richard Susskind’s opinion explained in this post, I believe the future may be bright for solos and small firms if they can find ways to use commoditization to their benefit.

Think about a startup company compared to a giant corporation. Despite having far fewer resources, the one major advantage a startup has is agility – the ability to rapidly implement new products and processes, test things out, learn from them, and make improvements in order to grow the business.

In this new era of commoditized legal services, the small guys can benefit from having this sort of “startup mentality,” while big law firms may struggle to adapt to rapidly changing customer needs.

The Internet gave rise to commoditization, so use it to your advantage. Find ways to use technology to acquire more clients online. Come up with new ways to package and sell your legal services. And above all, tap into the trend of commoditization rather than fighting it and remaining latched on to the ways of the past.

Key Takeaways

The key takeaways here are that consumers and small businesses will always represent a significant portion of the market for legal services. If you are a small firm or solo, you need to find better ways to service them, because they are most likely your primary market.

Rather than resisting or resenting the LegalZooms of the world, try to learn from them. You know your product is better than theirs, but the way you are delivering it to clients and billing them for it may not be. Think about what LegalZoom is doing that works, and find ways to bake those same qualities into your own service offerings.

Above all, focus on offering clients (AKA customers) the things they value:

  • Efficiency
  • Accessibility
  • Affordability
  • Guidance
  • Good Customer Service

As a solo or small law firm, you’ve got to take notice of the trend toward commoditization, or you’ll risk facing your extinction. The thought of legal services as a commodity may be appalling to you, but chances are it’s what your potential customers are looking for. So get out there and sell it to them!

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