Just think, for a moment, about the impact legislation and competition has on your Intellectual Property legal services business. The increasing demand for client-centric services, and the lingering perception that lawyers have little interest in doing what is best for their clients, means IP legal services professionals have to do a lot more to demonstrate their value in order to win, and retain, customers.
Now, you may be one of the many IP legal services professionals that find themselves doing what appears to be a endless cycle of activities that seem transactional and, more often than not, tedious. Let us take a basic example, the continuous filing of patent application updates. This is very common and there is always the tension with clients when trying to agree the terms and conditions, plus associated costs, if the process takes longer than expected. The end result is that you find yourself fire-fighting on a transaction-to-transaction basis, which then governs the relationships you have with your clients.
The major disadvantages with this scenario are:
You have less opportunities to prevent clients moving to a competitor other than competing on price, which then hits your bottom line. Clients see you primarily as one of many possible IP legal services professionals they can pick to get a transaction completed. It is hard to predict revenue growth as there is no guarantee clients will use your services in 6 or 12 months time.Now, some IP lawyers might think they are successful enough operating in such situations because they are busy, and have a steady stream of clients paying for the filing of patent applications (as per the previous example). If you are one of these, then you need to analyse what you are busy doing and if this really helps you grow your business effectively. Sure, you can do more of this, hire more people to cover the extra work coming in if you are lucky enough to attract it, and feel great. If that is your definition of success, then there is probably not much I can do to change your mind.
However, given my focus on relationship building, I am more interested in methods that increase customer life-time value. What can IP legal services professionals do to deepen relationships with prospects and clients, and get paid according to the increased value they bring to the table.
When you focus on lifetime value, you do all you can to create, measure, monitor and continually re-work processes that get clients thinking about the benefits they gain from using your services. And nobody else's.
There are three things you have to do to start this off:
Look at your current client base and... Find out how long they have been with you and how much money they have paid you. Calculate how many times you have had to negotiate prices in order to keep them on board, or the number of times you have had to discuss prices due to the volume of work you do. Find out how they made, and evaluated, the decision to work with you. Have you exceeded their expectations? Ask them how they feel about your services, and what they are NOT happy about. Based on the feedback you have gathered, start to develop a subscription/managed service-based value proposition. Key features within this should include:A fixed price or range of prices for a given period (e.g. one to two years), during which you specify what you will deliver. The client then knows upfront how much they will be charged and the benefits of the service you will provide. Always remember - clients will always pay if they feel they are getting better value than alternatives. You don't have to quote cheap prices as this will negatively impact the perceptions clients have of the service you intend to provide. Regular communications with clients to keep them updated on key issues that affect them or to help them answer questions they may have. This needs to be systemised as well, and does not mean contacting each and every client with a different message. Newsletters, email updates, webinars, etc all work well. Just make sure you know how your clients like to get information. A clear explanation of the benefits clients will get from the managed/subscription service, and how this is much more cost effective than paying per transaction. This is, perhaps, the most important step of all - DO NOT IGNORE IT! An evaluation of roles within your practice so that IP legal services professionals focus on client service and delivery, while other activities are delegated or outsourced. The subscription / managed service business model forces you to think about how to deliver great services without incurring unnecessary costs. If you are not getting paid by the hour, you want to make sure you don't over-commit resources to get results for clients. Monitor client feedback like there is no tomorrow. This helps you keep track of expectations and gives you an idea of the kind of information you have to provide on a regular basis (using a systemised communication process) to take away any client pains and frustrations.That is just the current clients. What about prospects?
Well, I'll repeat the phrase I used in a previous post...
How you attract and win clients will determine the value they attach to the relationship with you, and how long they stay with you as IP legal services clients.
If you want to attract high quality clients and get them to think about the value they would get from your managed IP legal services, then all the information you provide once they enter your sales funnel as prospects has to guide them towards that end-goal. It may seem easier to try and primarily focus on new clients for managed services if you are too scared of losing older, transactional-focused clients. That is not true. It will be a nightmare trying to make the changes to your behaviour and IP legal services practice to deal with managed service-type relationships, while keeping a large chunk of clients on the old business model.
A hybrid-model that combines the two types of relationships will be the norm, but you really want to do what the big management consultancies do - move to multi-year contracts that help you manage finances and relationships much better. That should be the goal, even though you don't do it 100%.
What I have highlighted above will be painful for some IP legal services professional and will, quite frankly, stop them trying to make crucial changes to their practices. As IP legal services professionals, you have to think about the external pressures you face and how you react to them. The status-quo is being hammered from different directions, and your focus on customer lifetime value has to be top of mind.
Just thinking about it will not help either. You need to take action - and that is what is going to separate the winners from the ones that just muddle along wondering why they work ridiculous hours with no rewards.
All the client attraction (and retention) activities you do have to support your end-goal - starting from the target niche you identify... to understanding what is going through the minds of your prospects... to the position of authority you develop... to the campaigns you run directing people towards information they are looking for... right up to the strategic services you provide which your prospects will want to ask you for.
Don't think lifetime customer value does not apply to your IP legal services practice. It does, and should. You have a duty to yourself and to your clients to provide great experiences and deliver great results so that your clients WANT to stay with you within a trusted, financially beneficial relationship.
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