So, how’s the situation with your belt? Getting tighter?
Six months ago I attributed tightening my belt to my fat and happy diet. Today as I was cooking a pot of chicken ¼’s for a batch of soup I was pleasantly pleased with the idea that tightening my belt means I might have to buy a smaller belt. No dining out on a Thursday night for me. I’m tightening my belt. No rich dinners of lamb chops and French fries on a weeknight. I’m tightening my belt. Was that thing we called prosperity really a belt?
Not only am I cooking at home to tighten my belt, I’m cooking chicken I bought for $.59 a pound! Add a few carrots, celery, onions, garlic and spices and a salad and I have dinner for under $5.00 (and fewer than 2000 calories) with left-overs for lunch tomorrow. At this rate, I’m not so sure that belt tightening is a bad thing. In fact, if I eat out less and cook at home more I may reinvent myself after I loose those 10 pounds of prosperity (or the $33,000.00 which I’ve invested in America)!
As law firms increasingly find themselves having to tighten their belts they may have to reinvent themselves. Not necessarily a bad thing. An article by Avi Dan on AdAge.com this week addressed the reinvention of “the agency” and suggested they might take a page from the investment bank response following the dot com crash. Law firms may also find some wisdom in this approach.
“The investment banks responded to the threats largely by changing their business model and taking more risks with their own money than they had before. Sure, they still did top-notch advisory work and acted as market makers. But their revenue and income growth has come mostly from betting with their capital.
Agencies like to believe they “partner” with clients, but unless they have skin in the game, that assertion is questionable. And the product, whether a creative idea or a media plan, needs to be sold to marketers at a negotiated market value, not simply an aggregated number of billable hours. If agencies really want to control their own destinies, they must de-commoditize their products and invest their own funds in whatever they think they can create a market for, whether it be content, media, product development or merchandizing. The old-fashioned approach — acting as agents on behalf of clients alone — is a slippery slope.”
Mr. Avi goes on to say that as the consumer continues to struggle with information overload, insight will become the organizing principle for agencies – why not law firms too I say. He used this example of how it might look.
Instead of dealing in price-competitive, commoditized creative and media products, a significant premium could be charged for data collection and analysis. Data and analytics need to be put at the center of the agency model and monetized aggressively. In the same way Wall Street analysts gave the marketing machine credibility, agency scientists will make sure creative ideas and media plans are relevant and engaging, and they will deliver a desired return on investment.
A little known factoid is that in the early days of America, lawyers would charge for their services “by the word.” This of course explains why many lawyers instinctively still use 5 words when 1 might do. It’s embedded in the profession’s genetics. Sadly for those lawyers, it is an old paradigm that doesn’t sell well today. Come to think of it, will any of the current pricing modes that have replaced “by the word” pricing sell well in these belt tightening days?
There was a lot of chatter about client service, knowing our client’s business and creating opportunities for our clients beyond filing briefs in the past 5 years of growth. Law firms may now need to examine their true motives behind these statements and their business model. Although change brings risk, it also brings opportunity. Harkening back to my make-peace-not-war days in the LATE 60’s when I was 3 years old (tee hee)….what if a law firm talked with the customers of their clients? Perhaps together they could find out what really matters. Perhaps the answer lies in law firms, their clients, and their client’s customers coming together to address in a global, collaborative manner where the delivery of legal services could deliver real value to the greater good for each party and reinvent themselves?
Oh, my. A remarkable thing just happened. While I was writing this post a rainbow appeared in the evening sky. A good sign, for sure. Maybe a pot of gold.