(Another long post but I think you’ll find it interesting!)
My last post frightened quite a few of you. I’m glad. I did my job, then. We can’t live in a bubble forever. Things are clearly changing in our world which means things are changing for your potential clients and how you will interact with them in the future. (And for those who want a more lawyer-centric post on change, here is another interesting piece from law.com)
On a side note, it even triggered a Twitter debate about the value of technology in practice. When you are client-centered, technology is a critical component of practice. It impacts your overall ability to service your client efficiently. Efficiency is a component of effectiveness. (Think computers, smart phones, e-mail,etc.). Advocacy skills and technology skills are not mutually exclusive. Technology doesn’t necessarily create a thriving practice but not keeping up with effective use of technology can certainly destroy a practice or prevent it from growing or even getting off the ground today.
My focus is on your clients and how societal and cultural changes will impact them. While the reason for a lawyer’s existence is ethical and competent advocacy, the key to a solo practitioner’s success is how quickly and deftly they create or revamp their solo practices, shift gears and make adjustments in their personal and professional lives in order to service their clients. But a solo will only limp along if he doesn’t stay very tuned-in to their potential clients’ economic challenges as well as changes in their spending habits, buying habits and lifestyle choices. Make no mistake: staying sensitive to and adjusting for these changes before the next lawyer are the keys to profitability and success.
In 2011 and going forward we will begin to see the mainstream application of what has so far been ‘fringe’ technologies. We will also see the beginning of a decade of major cultural and societal changes. The majority of Americans will have no choice but to alter their lifestyle and spending patterns permanently. Moreover (gosh, that word annoys me), consumers of all products and services are so much more sophisticated, skeptical (and scared) and heavily reliant upon information they gather from their online and in person social networks. Legal services are not immune from these changes and legal service providers would be smart to pay attention.
How will the wholesale adoption of certain technologies and the rather rapid demise of major cultural traditions impact all our lives? How will we approach building and marketing our practices with these traditions scaled back or gone? Hopefully, I’ll be able to identify them, how they are tied together and then give you ideas on what to consider when creating a long term business and marketing strategy for your practice, specifically from the client’s perspective.
The United States Post Office Is Almost on Life Support.
The post office is in VERY serious trouble. On CBS news today it was announced the USPS is discussing closing thousands of unprofitable post office locations! I’m not sure it will die but it will certainly have to change it’s current practices and offerings or succumb. If you look at your own habits you can probably see why the post office is under assault not only from competitors like UPS, FedEx and other shippers but also from how their customers use technology: E-vites, E-holiday greetings, text thank you notes, online direct billing and bill payment, e-filing of taxes, shopping, and much more. These behaviors have all conspired to deliver a fatal cut to the USPS’ jugular – first class mail.
Here’s the salt in the wound. Did you know with every one cent bump up in gas prices it costs the USPS eight million dollars more per year to run their trucks? And gas ain’t headin’ downward. There have been serious discussions mail should only be delivered three times a week as a means of reducing costs. The other: raising rates on first class postage and other services. With first class postage prices rising it impacts all businesses. Major cell phone carriers, cable providers and other monthly service providers are e-mailing their customers incentives to receive their monthly bills online. I just got my $10 rebate for going paperless with my cell phone provider. I also just signed up for auto-pay to avoid the monthly postage costs and late fees. Case in point: with the snow storms in the northeast my snail mail check payment took two weeks to get to AT & T. I was charged a late fee. They waived the fee (probably because they don’t want to lose me to Verizon as I have an iPhone). The question remains: why should I have to deal with this kind of costly unreliability – late fees, lost payments, stopped-check fees, etc? Translation: Why should you as a legal services provider not make it as easy as possible to get paid? (We’ll discuss in more depth later.)
As this trend continues it means the only pieces of ‘mail’ the majority of postal customers are or will be receiving in their mailbox will be unsolicited junk, some bills and the occasional greeting card from Aunt Sallie because she still believes in Hallmark. Therefore, even if you’ve created a magnificent marketing mail piece, if mail only gets delivered three times per week and the recipient wasn’t expecting it, it will be deemed unsolicited junk and go right into the shredder. Not the wisest use of your limited marketing dollars. The mail box no longer provides the excitement it once did. It’s a relic of days gone by in so many ways.
Bottom Line: Plan for a future where your use of USPS services are less and less relevant to your practice because the USPS is becoming less and less relevant to your client.
Consumers Pay Online Bills Faster
Well, if the USPS is going to become less relevant to your client for all the reasons listed above how are you going to get paid? Right now most of you send out monthly invoices, don’t you? And they are received in that nasty ol’ mailbox. It gets put in a pile of other bills to be paid once a month and forgotten. Then you send another one a month later gently reminding your client of payment. It requires the client to sit down and do the dreaded bill paying and feeling guilty they didn’t already pay you. They have to write a paper check and put an overpriced stamp on it and go to the post office at the same time they are rushing to Johnny’s daycare and mostly likely they forget to mail it. It sits on the dash board until the next trip. Then the next ‘more urgent’ bill demands immediate payment and they rip up your check, write a new check for that more urgent bill. Then your next bill arrives stating they are now 60 days past due. The cycle repeats itself and the client ends up disliking you! It’s not only costing you money but creating an (undeserved) attitude towards you and your services. Not good business.
Check out this survey:
-- A growing number of consumers are turning to their computers, rather than their checkbooks, to pay household bills. -- Paying bills online has become a mainstream activity among U.S. households. -- Western states, followed by the South, have embraced online bill payment faster than other regions, which may be driven in part by higher broadband penetration rates and online banking use in these regions. -- Paperless bills appear to be catching on as consumers recognize their convenience, security and environmental benefits.
It’s all about cost and convenience and this above survey was done four years ago!
I don’t know about you but when I get an invoice online I pay it much faster than a paper bill because there are less steps in the payment process and an ‘ unreal’ quality about it. What do I mean by unreal? When I write a check, I am strangely more invested in the invoice and attached to the money then I am when I pay for something on line via credit card. Make no mistake – this is not lost on the credit card companies and successful merchants. They know this detachment is real, too, which leads to faster payment for online merchants. Consumers find fewer steps and no costs associated with making online payments very attractive. In addition, a payment made on line with a credit card is also fast payment to the merchant yet delayed withdrawal from the customer’s checking account. Sneaky but falsely satisfying to the customer and very profitable to the merchant and credit card company. This phenomenon should not be lost on legal providers either.
Bottom Line: If the USPS continues its descent into irrelevance and clients pay online invoices more quickly because it is easier and they are more detached from the process, you will be wise to establish a system to invoice and collect payments online now.
The Demise of the Paper Check
If the above information doesn’t convince you to think about online invoicing then maybe this will. You and your clients may not have a choice for very much longer when it comes to online payments. Did you know that the UK is ‘outlawing’ paper checks by 2018? Even though the U.S. does lag behind the UK on this issue I do believe it will happen in the U.S. sooner rather than later. It is simply cheaper to keep banking transactions online.
Have I repeated myself enough times? Good. I’m going to do it one more time.
Bottom Line: As the banking industry forces our hands to go to electronic payments this will put the nail in the coffin for the post office. Psychologically consumers pay on line invoices faster because it is easier, cheaper, secure and environmentally friendly. They are also psychologically less attached to the process. Connecting these dots is not that hard. Get your billing and invoicing online.
There are many companies already providing excellent services for online billing and payment. I also believe any state still creating road blocks with out-of-touch rules will be forced to accommodate this reality. You would be wise to start investigating these types of services sooner rather than later. Check with the antiquated rules of your jurisdiction for a lists of dos and don’ts.
Next posts: The changing housing market, cell phones, newspapers, television, and how this will affect your practice.
If you are currently collecting payment online, let us know how it is working for you.