What Law Firms Can Learn from Grocery Stores
Until 2008, demand for corporate legal services grew rapidly. Large law firms could prosper with little attention to strategy or service. Today, however, firms face flat demand plus competition from other firms and alternative legal services providers. To maintain or gain share and protect profits, firms must improve service delivery. BigLaw managers need to look to other industries for important lessons.
The grocery store business is large, mature, and hyper competitive. Recent moves by Tesco, the largest grocery chain in the UK, offer service delivery lessons for the legal market. Last week, in Tesco Tries Out New Retail Recipe – In Push to Restore Sales Growth, a $1.55 Billion Overhaul Aims to Make the Company’s Stores ‘Warmer, Friendlier’, the Wall Street Journal reports how Tesco is improving customer experience to reverse a sales decline.
Tesco is adding employees to improve service and ensure product stays in stock. In addition, “small things matter” notes a company executive, for example, lighting brightness, shelf heights, and product packaging. Tesco carefully engineered multiple changes, testing them in 200 stores rolling out chain-wide.
Law firms can draw two lessons. First, the customer experience, which service delivery drives, makes a big difference in keeping and gaining clients. And second, service delivery improvements require careful testing.
Few law firms talk explicitly about improving service delivery but many now take steps to do so. These include legal project management (LPM), process improvement, and alternative fee arrangements (AFA). Law firms, like grocery chains, have ample opportunities to test such changes on a limited basis before rolling out more widely. Law firms can test by client, matter, office, lawyer, or practice. They can see what works, what does not, and expand the successes systematically. As they do so, they should develop delivery metrics to measure outcomes; these can include client surveys, costs, and legal outcomes.
Some lawyers may object that the grocery industry bears little resemblance to law firms. Exactly. It is time for law firm management to lift the blinders, to look to other markets for techniques that help maintain and improve profits in the face of tenacious competition and flat demand.
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