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As we transition from an industrial economy to an information, knowledge based one, there is a boom in entrepreneurship. More and more service based ventures are sprouting up. These invariably offer knowledge based consultancy products and services, drawing on the founders’ skillset.
Knowledge is now the equivalent of raw materials used in factories back in the industrial age when those who owned the means of production developed efficient processes to turn raw materials into goods. In doing so their assembly line goods became cheaper to make and delivered a more reliable quality than goods built by craftsmen in cottage industries. This drove down the price of goods, and made them more widely available to consumers.
When your business involves the provision of a service, knowledge-based solution, it is important to remember this parallel so you can use your raw materials (knowledge and skills) to create additional value and options for customers.
Finding the right solutions
If you really focus on your specialised knowledge and find the solutions your customers need, then you may be able to turn what you know to competitive advantage.
Think about how you can create value for your customers by delivering your knowledge in different forms to the traditional one to one consultancy, as a solution to the problems they face. Knowledge can be packaged up and turned into digital products, such as an app, book or DVD. It can be the engine for growth of your business.
Getting real clarity on your customers’ problems is the key to producing appropriate solutions that your customers will want to buy. I know this from hard experience as I’ve created an intellectual property digital course that has got traction, so I’m working on finding better answers to the question what my customers want, rather than what they need.
I’ve learnt that the focus has to first be on understanding customers’ wants and needs. Then assess whether you could meet those needs in new ways as alternatives to traditional solutions that already exist, especially if you can bring the price down to create additional value like factories did in the industrial economy.
Alternatives to one to one consultancy
In conclusion, looking at your knowledge and skills in a totally new way, and understanding your customers’ wants and needs, is the first step to appreciating the significant value you could add to your customers’ lives due to the variety of ways in which that knowledge may now be deployed.
While knowledge is generally delivered as a one to one consultancy service, you may be able to find a solution that suits your market, so they can access your insights in certain ways, for example, as informational products on a ‘one to many’ model.
Alternatively, knowledge could be embedded in a software system owned by your business. Knowledge fuelled by IT is likely to result in many benefits, including that of reducing the ultimate cost for consumers.
However, beware of jumping onto a tech solution too soon.
While all the biggest companies in the world are tech companies, people need to develop new skills to manage the intellectual capital that drives their service businesses, test the market, speak to clients, and only then develop a tech solution.
So to find out more about how to use the upcoming reforms (which will enable lawyers to provide their services outside a traditional law firm) to your advantage in order to solve legal industry problems in novel ways then you’ll want to attend our upcoming event.
Tech startups are all the rage in the legal industry
There is so much hype around AI in the legal industry that it’s made tech and innovation a significant focus in that sector.
Many start up tech companies are sprouting up aimed at solving every conceivable face of need that might exist in legal life ranging from contract lifecycle management to legal service marketplaces, cybersecurity to legal analytics. Some start ups are simply cutting the costs of accessing legal services by putting people in touch directly with individual lawyers who then work with them to solve their particular needs. The model invariably involves the use of solicitor consultants which is such a successful in the legal industry. It works because it means law firms don’t need to pay salaries to the lawyers providing the skills their clients want to access. The firm simply share the fees they receive with the individual lawyer, whether the lawyer brings the work in or the work is provided by the firm. It’s primarily a vehicle through which to access insurance, and a business through which to provide services directly to the end client. I predict that this model is going to be challenged by the new SRA regulations coming into effect on 25 November 2019.
Large firms see tech as the key to delivering a better service to clients and cutting costs in order to deliver more for less. Many of them are therefore investing in tech startups.
What large firms want
Big law firms want to see solutions that automate repeat elements of jobs leaving only the bespoke service to real lawyers. Their ultimate aim is to design the office in a way that will make the lawyer’s role less about drafting and organising processes and more about using their judgement, experience and business advice.
So, with the spotlight on tech as it is, the upcoming regulatory changes – which will enable solicitors to deliver most legal services from ordinary businesses rather than from a regulated law firm, or to provide even reserved legal services as freelancers – may not get the attention and excitement they deserve. Yet they potentially hold the key to a greater transformation of the legal industry than any of the regulatory reforms that have gone before.
After all, to build a successful app or tech start up, you need to understand the market you’re trying to provide your products into. If you tackle tech product creation without first getting real clarity on the customers’ problems and what the customer wants and needs, the innovations you introduce are less likely to hit the mark and succeed. I discussed this in my recent blog Digital Products Why Relying On Customers To Tell You What They Want Won’t Work
The tech should come last, once the problems of the market you’re in are fully understood, and also once you’ve launched a quick test product.
Everyone nowadays wants to become an entrepreneur, so it’s the turn of lawyers to try their hand at entrepreneurship. Never before have they had so much freedom from the regulator than they’re about to get.
Some of the most valuable assets our businesses generate in today’s economy are intangible. The value in successful businesses lie in the brand, digital content, website, sales system, know-how, any special software written for the business and the like.
It’s important to manage the knowledge assets, not just as you would manage physical assets in a manufacturing context, but even more so because by their very nature, intangibles are easy to lose. Being transient, and non-physical, their legal significance can all too readily be overlooked.
An equivalent process to the factory assembly line should happen within your service business so you avoid re-inventing the wheel, or losing knowledge.
Knowledge is the asset that drives your service business
Recognising that knowledge is the asset which enables you to deliver your solutions is the key to building a scalable service business. Generating value in business today involves managing those knowledge assets which include your relationships, business processes, brand and reputation. Ownership of physical assets is no longer the key to developing a valuable business.
As an intellectual property lawyer who has built a law firm from the ground up, I’m well placed to help law firms, and individual lawyers whether you’re considering setting up as a freelancer, a non regulated business, a law firm, or a legally focused tech start up to understand the impact of the impending regulatory changes, and what’s involved to build a brand in the knowledge economy. So, to set yourself up for success in the 2020’s register your interest to attend our upcoming event.