Understanding Why Clients Hire Law Firms
To grow and prosper in 2013, large law firms should understand why clients “hire” them.
Note I wrote “hire” and not retain. Mary Abraham’s recent post Milkshakes and Purple Cows summarizes a Clayton Christensen talk in which he discusses why consumers “hire” a product. That is, what is the real reason a someone buys a product?
He says that “to motivate a customer to buy your product, you first need to understand the job for which that customer is likely to ‘hire’ your product.” Christensen explains the research that found why people really “hire” milkshakes. The answer is not as obvious as you might think. Mary relates the findings: “(1) to allay hunger and provide entertainment during a boring morning commute and (2) to help parents placate children with a seemingly nutritious treat.” Understanding the real job for which consumers hire a product allowed a fast food chain to take steps to increase sales.
Apply this thinking to the corporate legal market to consider why clients might hire outside counsel:
- Address tough legal problems
- Augment a thin team with additional standing resources
- Supply highly specialized legal expertise absent in-house
- Deploy a big army of lawyers for a one-time event
- Solve a problem at a lower cost than the law department can
- Signal an adversary, by retaining a particular firm, that the company is committed to winning this dispute
- Relieve inhouse counsel from effort or worry
- Reduce the total cost of legal services for the company
- Insulate the law department from the fall-out of a bad legal outcome
Cost pressures notwithstanding, many clients probably still hire firms so they don’t have worry about the problem or to insulate against a bad outcome.
Firms that can identify clients that hire for a different job – for example, lower cost, faster turnaround, better communication, or more intimate industry knowledge – can adjust their service delivery to win that work.
How do you figure out the real hiring reason? Christensen stood in a fast food joint for 18 hours watching customers buy milkshakes. But only after researchers interviewed milkshake purchasers in the parking lot and asked them about why they bought one did he understand the real reason and gain actionable insight.
We cannot replicate that field work in the legal market, but firms can send teams to clients. A team means more than just partners. Including experts in pricing, technology, finance, and marketing likely will increase the chances of identifying the client’s real hiring needs. At least for some clients, I suspect the real need includes more technology than firms use or deliver today.
A firm that excelled at figuring out the real job might become a “purple cow.” Mary explains this is a reference to Seth Godin, who notes that people see cows all the time and think nothing of them. If, however, the cow is purple, they notice. The point is that real differences stand out. Perhaps in 2013 some firms will learn how to become purple, how the service they provide consists of more than just law practice.
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