Dan: Welcome to this week’s Boss to Boss podcast. In our interviews, we feature remarkable people doing imaginative things in often unimaginative markets, usually from the world of B2B. This week, we’re joined by Ian Jeffery, former CEO Lewis Silkin.
Of all the magnificent minds I’ve encountered in the legal market, Ian is one of the most fascinating. Everything this man says is somehow so succinct yet so substantial and his depth of insight within major marketing issues such as positioning, productization, customer experience and brand messaging is rare to find even within actual marketers, let alone leaders of major law firms, so the opportunity to have Ian on the podcast today and really dig into some of these topics within the context of the legal market is hugely exciting.
Ian, thank you so much for joining us.
Transcript
Dan: So, we’re gonna kick off with a bit of a general one if that’s okay. So I’m aware that there’s this tension between those firms that may refer to clients versus those that use the language of customers or consumers. Is this just nothing but semantics or are there real practical implications to the language that firms adopt?
Ian: Well, thanks, Dan. Firstly, it’s great to be here and I’ve been looking forward to discussing the subject with you. It’s an interesting question. It’s not one that’s unique to our times. It’s something firms have looked at over the years but I think because of some of the things we’ll come on to talk about, it is a uniquely interesting question.
Should professional services firms refer to clients or should they refer to customers? What I think we’ll come to look at is how far firms should think about the buyers of their services thinking like clients or thinking like customers. That should in turn go on to guide the firms in how they package and deliver their products and services to the market. So it’s partly a semantic distinction, but for reasons we’ll come onto, I think it’s got increasingly practical applications if firms think of it in that way.
Dan: And would you be able to just maybe elaborate on that and give a couple of examples of how it can impact things at a practical level?
Ian: Yeah, I think it probably helps to start with some explanations of what we mean by these different terms and to draw a sort of working distinction between client and customer.
So typically, if you’re looking at a service that’s being delivered over a period of time where it’s not just the outcome that’s important to the buyer, it’s also the process of getting to the outcome – and I think crucially where the buyer believes the skill in delivering that process is something that significantly tributes to a better outcome whereas looking at customers, one’s thinking more of people who are perhaps at a single point in time obtaining a pre-product or a service and when their focus is on the outcome – particularly where it’s a service – purchase being less concerned or perhaps not really concerned at all with the way in which that service is delivered.
So to go back to your question and give a couple of examples, on the client-side if one looks at a major business purchase of legal services, one’s selling a company that’s been built up over 10 years or one’s involved in a major piece of commercial litigation, the client’s likely to place a very high degree of value on not just the expertise in the outcome but the way in which the professional works with them to guide them to a good outcome. If you take a completely different example of legal services, so for example the drawing up and preparation of a relatively simple will, it’s probably the case that for many clients, many potential buyers in that market, what they’re looking for – although they want to make some choices along the way – is a simple understandable product which is delivered pretty quickly and then in some cases for of fixed cost and for known outcomes.
So those are quite different types of legal services, but they’re all services which traditionally have been provided by solicitors and by law firms.
Dan: So is this a bit of a corporate service versus consumer product spectrum? So you’ve got the lower value end of the spectrum at one end and you’ve got £10,000 an hour corporate offering at the other. Is it as simple as that? And if it is that spectrum, those at the more corporate end should sort of continue to exist the way they always have? Or are they missing a trick by not adopting more of a consumer product-oriented mindset?
Ian: Well I think the starting point is what you’re suggesting there is the distinction between services to businesses being more client-like services and services to consumers being more customer-like services. Quite a degree of empirical truth in that.
So if you observe the way these things are going in the market on the business side there are still going to be a lot more kinds of high-value, long-duration representation and advisory services and on the consumer side, you see much more of a move towards a kind of vendor to customer type of market. But there are a couple of qualifications I’d probably want to make to that.
Smart firms and the smart business developers and marketing professionals in those firms will already be asking themselves: what are the services we’re providing where elements of vendor to customer thinking could help us alongside elements of professional to client thinking?
One is on behalf of my professional colleagues, the £10,000 an hour – just to reassure any listers not familiar with the buying of legal services – it’s a figure of speech that we’re putting in there. In fact, there was a recent report of a judge being very critical of a lawyer advising a very substantial business of charging slightly over a thousand pounds. But I think the more important point to make is that it would be dangerous, and become more dangerous over time, for firms serving business clients to think this idea of Customer Behaviour has nothing to do with us. This is something that will only happen at the lower value consumer end of the market. What’s happening in relation to wills, for example, what’s happening in relation to divorce and family separation services where buyers have a much greater range of choices, will progressively happen in the business-to-business Legal Services Market.
So I think the smart firms and the smart business developers and marketing professionals in those firms will already be asking themselves: what are the services we’re providing where elements of vendor to customer thinking could help us alongside elements of professional to client thinking?
Dan: And presumably that’s probably where the opportunity to differentiate is greater because, to be frank, I’m not saying that firms shouldn’t look to do it with Wills, for example, but there are a couple of fantastic brands who have been demonstrating the significant benefits of adopting that mindset with that particular product for a few years now, Whereas I guess one could argue that at the other end of the spectrum, there remains an opportunity precisely because of the power of status quo. In my experience, there’s such a continuing resistance to that particular change and for that very reason it may represent a bigger opportunity for differentiation. Or are actually they right? And there are some very legitimate reasons why they should be careful and in making that change.
Ian: Yes, I’d agree with that. A couple of qualifications I suppose on that – and one is just to sort of swing the pendulum back a little bit – talking about the example of wills, there certainly are 1 or 2 very prominent new business model providers in that market. But equally, there are still many, many buyers of those services who have complex affairs and complex needs and place a significant value on the experience they have of working with a provider, working with a professional to come to good outcomes. So, I don’t mean to be saying that the whole of the wills and probate market is already flipped over into vendor-customer type marketing and service model, what I’m saying is there is a significant segment within that market where the buyers value simplicity. But then to take it back to the idea which I largely agree with, that the more complex the services, the more value that’s involved, the slower the move we’re likely to see towards vendor-customer aspects of behaviour in the marketing. But even with the higher value, more complex services elements of that will start to come in over time, and therefore as I said earlier, I think the smarter firms, the smarter marketing professionals in those firms will be asking themselves those questions.
Dan: Yeah, it’s really interesting. I sometimes wonder if there is a perfect point along this spectrum for any given offer or if it is a question of differentiation?
Ian: Yeah, what we’re really talking about is how firms may begin to think about the way they package up and market their services and start to think more in terms of a vendor-customer model for some areas. There will still be barriers to doing even that so the client/ customer semantic debate can trigger negative reactions among professionals, and there are some quite good reasons for that.
So the way that legal services – and I think this is probably true of other professional services – have grown up, they tend to be fairly heavily regulated. So there are rule books that apply, and crucially providers of those services are also bound by other quite robust legal duties, so for those two regulatory reasons, professionals tend to think of themselves as rather different from broader providers of products and services.
I think the other principal reason that we would sometimes come across is people who’ve traditionally sold high value professional services worry about the repackaging of those services and the potential loss of perceived value in them.
I think also there’s a degree of individual and collective self-image that professionals attract very talented people many of those talented people recognise their talent and value and start off in the comfortable notion that the skill they have and the knowledge they have is something that the market will want to approach them for and it’s only over time one works in that kind of environment and becomes used to the very competitive nature of service provisions between firms that you start to think of yourself more as a provider in the market, you have to go out and seek the custom of the people out there who are the buyers of the services.
So you’ve got these kinds of regulatory notions. You’ve got these notions of self-image. I think the other principal reason that we would sometimes come across is people who’ve traditionally sold high value professional services worry about the repackaging of those services and the potential loss of perceived value in them. Sometimes that’s expressed as a fear of a race to the bottom, but people have different terms for that particular phenomenon. I think that’s probably the third bit of resistance that one comes across in doing that.
I think it is possible for firms to have a two-tiered service that they can provide so you can couple high-end advisory services in an area where you’re very expert with a lower price or fixed price service which allows you to access a segment of the market that you weren’t previously serving or stops you losing your marginal customers who were just beginning to find you too expensive.
So to meet that resistance, one has to find ways of getting people confident that with some of this different thinking actually greater value can be unlocked, not just for the potential buyers of the services, but also for the firms and providers themselves.
Dan: Right? So it’s about demonstrating the value and then getting the buy-in from there.
In your experience, in order to kind of make that shift was it a very kind of purposeful, predefined plan? Or was it more sort of just something that happened organically?
Ian: Yeah, as we were saying earlier, I think it would be unusual and probably unwise for any firm to suddenly say we’re switching the term ‘client’ for the term ‘customer’ across all offerings. Part of it for a business is to reposition itself somewhat so that the marketing approaches which are more suitable for a vendor to customer relationship will be deployed and perhaps we’ll talk about some of those in a minute or 2.
I think it is possible for firms to have a two-tiered service that they can provide so you can couple high-end advisory services in an area where you’re very expert with a lower price or fixed price service which allows you to access a segment of the market that you weren’t previously serving or stops you losing your marginal customers who were just beginning to find you too expensive.
Dan: That must make the internal buying so much easier as well. It makes a lot of sense because I guess suddenly it feels like it’s not a threat but it’s like an addition. Presumably from an internal perspective, that that messaging is pretty pretty valuable?
Ian: It’s essential and one of the greatest things that you can pull off in managing a professional services firm is to go from the point where there’s resistance to a new idea to the point where you’ve proved it. It can be so within that kind of environment. The proof point of one of the peers within the partnership or the firm doing something successfully is extremely powerful to all the other peers.
Dan: Yeah, absolutely.
Something that I think we’ve seen quite a bit of in the legal industry, and I think it’s probably true of all forms of professional service, is that some of the most obvious innovations and those companies that have embraced this change with the with the greatest speed and enthusiasm have not actually been from necessarily within the legal industry at all, but rather external companies that just happen to be solving a problem within law.
I just wonder, what is it about those companies that means they’re not necessarily bound by the constraints, perceived or real, that those firms within the industry might face?
Ian: Well I think that question brings us to one of the most important parts of the discussion. One of the biggest drivers for change in this area is where there are businesses coming in with a tech pedigree and providing services to buyers in substitution for the services that they might have previously come to law firms for. Those kinds of new entries bring a few different things.
Firstly, they don’t tend to have to operate under the regulatory rules that the law firms or the accountancy firms themselves are working on and they therefore don’t necessarily owe the same duties to the class. Not to say they provide in any way a bad service but it’s just about the kind of mindset that the businesses have. But probably more importantly they come from a tech service delivery background where the language tends to be around customers, tends to be around customer service or even the alternative term ‘users’. So if you go on to one of those online services that we’re talking about and you look through their offering, typically in their service description page, they’ll tend to offer customer stories rather than client stories.
They’ll typically bring a view of the product or services which is much more outcome and perceived value based.
So it’s one of those issues where – going back to our point about semantics at the beginning – the nomenclature may be starting to change in some of those areas because you’ve got new providers coming to the market who are more comfortable with those alternative terms. And I think the third point is they’ll typically bring a view of the product or services which is much more outcome and perceived value based. So it’s more outcome focused. It comes from this background of providers who have a customer or user frame of reference and it’s also able to operate in the lighter touch way being outside the regulatory constraints that pretty much all the law firms have to operate within.
Dan: So what should a more traditional firm do to learn from that?
Ian: I think what this is, more than anything else, is a prompt to recognise that the forces we’ve been talking about will change the dynamics of these markets over time. It started with many of those consumer professional services markets and it will move increasingly into the business-to-business professional services markets.
So I think firms and their business development and marketing professionals need to be taking a sort of classic structured view of the marketing strategy and the marketing mix process and just using this to prompt themselves as to whether there are any changes that could be made to the way they’re carrying out those steps of analysis and improve what they’re doing by reference to this notion that vendor to mass customer dynamics are more relevant to what they’re doing than single professional provider to single client.
I think what this is, more than anything else, is a prompt to recognise that the forces we’ve been talking about will change the dynamics of these markets over time.
Over time, it may help to make that real by perhaps going through a little bit of that analysis. So the way I always think of the approach to marketing is segmentation and the marketing mix – product, place, price and promotion. But in the first group of the segmentation targeting and positioning I think the call here really is for the service that you’re interested in and thinking about how the market breaks down. There are different groups of buyers, some of which value an experience that has all the hallmarks of the old style professional provider to client model, but is there also a segment where people are interested in more of a consumer style experience where a quick delivery of a product or an outcome is what they’re really looking for.
The next thing is where your firm is targeting itself. Are you staying with those pure high-end clients who want the whole sort of traditional client experience? Or are you a firm that can access that newer segment of the market where people want solutions, they want outcomes delivered in a simple way at a fixed price? Once you’ve got that settled, it’s then moving into the product, place, price and promotion type analysis and if you think about those 4 things with a traditional service delivery model, the product tends to be that advisory or representation service which was delivered over a period of time whereas on the newer side of it, that may be simply an instantaneous service or near instantaneous service which can be accessed within a matter of a few hours.
Dan: Just one final question then. I wonder how much of a barrier the issue of price is with this? Because obviously there’s this complex, expensive stuff and one end, and the other end a little less personal, a little more straightforward, more product oriented and thereby cheaper. How much of a barrier that is for those firms that may look at it and say, you know what, we could do this but actually for our brand and where we want to be positioned in the market, it could be seen as undermining the brand.
Ian: One way to think about that is not so much to have the inside out notion of what are we currently doing, what are our services and how might those be tweaked and repriced, repackaged. But to start from the other end of things, thinking about what is the overall market for this type of service? How has that changed? How is it developing? Because if you do that and you realise that yes you’re providing a good service to a traditional big segment of that market but there’s another opportunity which you’re not yet exploiting, that’s more of a driver to think about repackaging your services to try to tap into that newer market.
Dan: Awesome! Well, Ian thank you so much for this, I suspect we’re probably in the very early stages of this debate and I imagine that as the years pass different areas of law will gradually be introduced more practically into this question.
Really, really appreciate your time. Particularly given that incredible experience that you’ve had over the last 15- 16 years at the helm, driving a lot of this innovation, I’m sure within your own firm. You speak with such conviction and detail, I’m sure it’s gonna be tremendously helpful to people. So, thank you so much for your time.
Ian: Dan, it’s been a great pleasure. Thanks for having me on.
