In RFP responses, pitches and proposals lawyers and firms often talk about providing value-added services to clients. But, when asked about the increased value they provide over the competition, most lawyers are unable to specifically and tangibly define the added value.
What is value? The answer to that question should be "whatever the client thinks it is". In this hypercompetitive market for outside legal services, law firms and lawyers need to be increasingly innovative in creating and providing unique and useful value-added services for clients to differentiate their firm.
Clients most often define value in terms of performance, total cost and a combination of other subjective factors. The ideal value is that performance which maximizes the result or potential outcome for the client at the least cost. So, value-added to clients often means decreasing or maintaining cost while increasing or maintaining performance and results.
Not all value-added services are as effective as others. For example, a very common value-added service many law firms are providing clients are periodic seminars, alerts and newsletters. Precisely because so many law firms and other providers offer complimentary seminars and newsletters, they no longer add much value.
To create effective value-added legal services, there are at least three steps to consider; initiation/origination, analysis/testing and implementation.
Creating useful value-added services requires information, research, thought and creativity. Innovative ideas can be generated and developed in numerous ways. An excellent source of value-added ideas and concepts come from client's needs and suggestions. In order to assess client's needs and gather suggestions, lawyers must routinely ask for feedback on specific aspects of service. Specifically, one question to ask when considering creating value-added services is, "How can we make our (fill-in-the-blank) service more useful to you."
For example, an existing client of one law firm was asked how the firm's labor law services could be made more useful. After an in-depth discussion, the client recommended the firm create private, secure app composed of a series of checklists with items and issues to consider when dealing with unions. The law firm created the app with the checklists and included the firm’s lawyers and all contact info if any client representative needed additional assistance or legal advice. The client is satisfied because the firm provided a service which helps systematize procedures and reduce risk and the law firm has created a lead-in service to gain other labor-related work. Thus, value is added for both the client and the law firm.
Vetting, Analysis & Testing
An effective method by which to analyze value-added services is to gather information from relevant stakeholders, then use strategic thinking and creativity to refine the innovative value-added service ideas. For example, one law firm gathered specific information on certain clients' needs (companies operating cannabis-related businesses in certain states), then gathered input from other stakeholders and created a unique service package that responded to those needs and provided added-value services in the package. The firm analyzed the service package for content, possible weaknesses, the process of delivering the services, then consider input, internal feedback and other information to tweak and enhance the service package.
Testing value-added services is useful to measure client response and gauge the potential success of the service. Testing can be conducted in a formal or informal manner, depending upon the nature of the services. Identify a few key clients or targets and gather their comments, suggestions and feedback. If clients’ responses are not as anticipated or planned, further refinements and improvements can be made.
Before implementing value-added services, it is important to determine whether the service is intended for existing or potential clients. With existing clients, it might be beneficial to provide value-added services on a complimentary basis i.e. at little or no cost to the client in order to cement significant existing client relationships. However, if the value-added service is created as a “lead in” to potential new clients, a nominal or reduced price or fee should be considered.
Marketing truly innovative value-added services is an effective way to differentiate a firm. As with all services, value-added services should be marketed in a coordinated and cost-effective manner, designed to contribute towards achieving the strategic goals of the firm. Accordingly, a goal statement, strategy, budget, marketing vehicle implementation schedule and reporting procedures should be drafted.
Value-added service creation, refinement and implementation is a process. Value-added services must be continually improved and refined to respond to the market's changing needs and to the client's definition of value, otherwise the value will erode and eventually become obsolete.