Understanding your Legal Services Business ModelApr 20, 2015
I just left the Washington State Bar's "Future of the Practice" meeting and there was some great discussion about ways to increase access to legal services. If you aren't familiar with some of the steps that the Washington bar is taking, including their creation of the Limited License Legal Technicians (LLLT) role, they (we—I'm a WA bar member!) are on the cusp of some solidly innovative work to evolve the practice of law.
One of the things that came up repeatedly in the meeting was the notion that most lawyers simply don't have business models that can profitably support clients at the lower end of the resources spectrum. That simultaneously strikes me as true and insane. How is it that lawyers can't seem to meet the demand of the majority of people who need legal services?
One answer is lack of efficiency, and I think that is a big part of it. While I still believe that cost control is not the final answer, I do think that a law practice that runs efficiently—that is one that can handle client work with optimal flow and as little waste as possible—will naturally be profitable at price point that is within reach of more potential customers. Therefore lawyers who optimize their processes for the efficient delivery of customer value will be better at supporting access to legal services for lower-income clients. (And the key word here is lower. One study cited at the meeting said that as many of 50% of "middle income" people, those making more than $100k for a family of four, go without legal representation when they need it.)
Of course traditional lawyer business models are rewarded for inefficiency (even if that is the worst-kept dirty little secret in the industry). So why haven't new models sprung up to take the place of the old, inefficient ones? On one level, of course they have; it's just that many of them aren't the traditional practice of law (insert standard LegalZoom reference here). And to some extent there are law firms out there trying new things, but since the access to justice problem keeps growing there don't seem to be enough of them.
One suggestion that came out of the meeting today (I think from University of Washington Law School Dean Kellye Testy but it was hard to tell on the phone) is that many lawyers simply don't have the business experience to know how to dissect and adjust their business models. Let me take a small step towards fixing that.
One of the great tools that has come from the Lean/Agile/Lean Startup revolution in the business world is the Business Model Canvas and its close cousin, the Lean Canvas. These are visual frameworks that help entrepreneurs and business leaders think through their business models and create variations on those models (often dozens of variations). The canvases are meant to be quick, visual, and sometimes disposable, but the act of going through the exercise will help you gain tremendous insight into both your current business model and ways you can change it to unlock new opportunities for your practice.
I urge you to watch the video embedded below on the Business Model Canvas, and then check out this PDF on how to use the Lean Canvas. Then print out (or draw on your whiteboard) one of the many versions of the Business Model Canvas or Lean Canvas that can be found online and start working with them. (If you want to know about some of the differences between the two, the Business Model Canvas folks offer their thoughts here.) Of course, each version has a corresponding book as well: Business Model Generation by Alex Osterwalder and Running Lean by Ash Maurya. But since each canvas is offered under a Creative Commons license, you can start trying out the tools with minimal investment.
One quick suggestion: Don't fill them in directly. Instead use sticky notes. You'll want the whole thing to be very dynamic and fluid, and sticky notes help make that possible.
Personally, I love both tools and I'm agnostic about choosing one over the other (each works better in different situations). I've worked with several lawyers now using one tool or the other, and they all have said that the process has been extremely valuable. So I strongly encourage you to give them a try, and if you have any questions or want to talk through your own business model, please don't hesitate to start a conversation with me!
© 2015 John E. Grant.
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