Josh Bernhoff of Forrester has written a very interesting article entitled ‘Welcome to the Age of the Customer. Invest accordingly.’
In this he states that “Disruption is rampant, it’s hitting every single industry, caused by customers with powerful technology on their side. The question is not whether your industry will be disrupted. The question is when.”
Forresters argument is that as customers gain access to more real time information about pricing, product features and competitors they become more empowered and in effect hold all the advantages. Forresters conclusion therefore is that we are now entering the age of the customer where “The only sustainable source of competitive advantage, the only defensible position, is to concentrate on knowledge of and engagement with customers”
With this in mind, organisations that will thrive will be those that display the following characteristics:
A customer obsessed company focuses its strategy, its energy, and its budget on processes that enhance knowledge of an engagement with customers, and prioritizes these over maintaining traditional competitive barriers.
This hypothesis can be applied to the legal industry – a market that is experiencing structural change and an environment that will not return to pre-recession conditions:
- Client expectations about the way legal services should be delivered and managed have matured and will continue to do so
- New entrants to the legal market will be able to offer legal services in new, more efficient ways without the legacy and baggage of the accepted norms
- New sources of investment will be available to legal service providers but will demand the effective and efficient management of operations
- Technology will continue to accelerate the ability of consumers and suppliers to make more informed decisions, react to changing conditions more rapidly, share information and collaborate more closely.
The reality is that the traditional areas that law firms would emphasise to their clients – technical expertise, international capability, specialist knowledge and so on may no longer be enough on their own to differentiate themselves from their competitors and that traditional approaches and methods of serving clients is not sustainable. In the long term the law firm that is internally focussed, has rigid practice structures and focuses on a purely technical product will have a very small market to operate in.
Those firms that will develop in the new environment will:
- Orientate their operations around the clients they serve
- Have the agility to adapt and develop to support deeper relationships with their clients in real time
- Be able to tailor their products and services to meet specific need
- Have the flexibility to manage and deliver legal services and advice from multiple sources
No firm will claim not to orientate themselves around their clients but saying it is not the same as doing it.
It will be those firms that recognise that deep client engagement is the only path that will make corporate-wide shifts in thinking and behaviour.
The firms that master this will thrive in a world of constant disruption, because their clients know and trust them, and they make investments in those customers. Those that keep riding their current model and attempt to lock in customers will plateau and eventually wither.