Trying to be all things to every client may result in being few things to none.
Last week, I wrote in Why Value is not a Virus that I thought corporate legal work would diverge into lower-end, more commodity-like work and higher-end, larger risk/reward work. Both would be priced accordingly. There were some great responses, that I note in an update at the end.
Three observations follow for me:
1. Any size firm can work profitably in either market.
2. Since costs are crucial (particularly at the low end), few firms will be able to properly bundle lower- and higher-value work.
3. All firms will have to be experts in managing projects, collaboration and using technology and newer service providers.
So when I try to step away from the legal reading, something seems to pull me back in. This time, it’s an article by James Surowiecki in the New Yorker. He focuses on companies like Apple and Acer that price products either at the premium end or the low end:
These two strategies may look completely different, but they have one crucial thing in common: they donâ€™t target the amorphous blob of consumers who make up the middle of the market. Paradoxically, ignoring these people has turned out to be a great way of getting lots of customers, because, in many businesses, high- and low-end producers are taking more and more of the market.
For my argument, “middle market” doesn’t mean the size of the client. It means the approach toward the market. Then Mr. Surowiecki brings up what is really different now:
The boom in information for consumers has also severely weakened middle-market firms. In the past, these companies were able to charge a premium price because their brands were taken as signals of reasonable quality and reliability.
For some law firms without a focused strategy, the middle market may become the muddle market.
This is why things like the ACC Value Challenge and other legal rating or cost/service information is so important. It is why the state of the economy is not what is driving change. As researchers like to say, it is a correlation but not the cause. The cause is the global competition that clients are facing. This cause was there before the downturn, it is here now, and it will accelerate change even faster when economic activity rebounds.
Since so much is happening right now, and much of it doesn’t fit in this space, I set up lawriver late last year. It’s just a simple site that’s easy to check from your desktop or mobile.