Quality, Quantity, Cost and Time
The four horsemen of the apocalypse in terms of running a service business are Quality, Quantity, Cost and Time. There is always a trade-off between them.
For example, if a customer wants one normal transaction completed in half the time you will need more chargeable time in a shorter real-time period in order to meet their requirements. This is fine if you can postpone other transactions; otherwise, if insufficient extra time is available, then quality suffers.
You might have to delegate some of your work to others in order to make the time available to meet the client’s deadline. Depending on whether you have others to delegate to and their cost to you, this will affect the cost. Often, in practice, if a customer wants a job done significantly quicker you would seek a premium price to cover the additional costs of using a higher amount of people power.
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The problem comes when we are dealing with third parties over which we have no control, such as the Probate Registry or HMRC, Banks and other financial institutions when we are dealing with estate administration. Experience now becomes a factor to help you explain to a client whether their timeframe is possible and whether it needs to be modified.
Never has it been more urgent for law firms to consider these essential factors when faced with ever stronger consumerist behaviour by potential clients. 71% of respondents to Tolley’s Bellweather Report 2019 – The Changing Face of Law, say their work has been compromised by client demands and consumerist behaviours. Does this possibly mean their firm’s business model is no longer fit for purpose?
A recent simple piece of research of my own looking at 10 local law firms produced an interesting range of responses to the new SRA Price Transparency rules. All firms were compliant, although one just barely, in my opinion. Only one firm explained the probate process and used some simple examples to illustrate how their firm operates and what it charges. To me this showed that it is possible to comply with the new rules but yet adopt a business opportunity approach which would make it easy for a customer to become a client.
The remaining firms’ attempts varied in their compliance and each failed on some aspect of the rules. Overall, effecting any kind of price comparison between the prices quoted was nearly impossible. However, you would dismiss at least three firms from the list on price if you were a consumer looking for a good deal. Most firms did explain what assumptions they had made in coming up with a price and what sort of things were likely to negatively affect the price quoted.
None of the websites I looked at used the new SRA logo to explain how the firm is regulated and why this might be of benefit. This is a pity as research, undertaken on behalf of the Law Society prior to the coming into effect of the new price transparency rule, showed that when regulation is explained most consumers value it.
In the Tolley’s Bellweather Report solicitors believe 33% of their business on average is won purely on price rather than on the expertise of the firm. A telling 26% of those surveyed did not know enough to judge whether the new transparency rule is a risk or an opportunity. Shouldn’t all firms be discussing this and deciding how to manage the risk if that is how they perceive it; or how to make the most of this opportunity, if the firm is more optimistic? Now is not the time to be sitting on the fence but to be proactive in deciding what the firm is offering to make it different from the competition and investing in the right people and technology to support that approach.
I am taking this theme as the subject matter of my webinar for Certainty on 28 February 2019. Visit Certainty to book your place.
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