We are continuing to discuss the major societal and cultural changes coming to a head in 2011 and how your clients are going to be impacted by them. You can read the first two discussions here and here to catch up.
This third post is going to discuss changes in housing, newspapers, communications and social media.
How Is The Housing Market Going To Impact Your Practice Even If You Are Not in Real Estate?
By now most of you know the real estate market took a HUGE hit in 2008 – 2010. It is still in serious distress even though the talking heads think we have bottomed out. We haven’t. There is what is called the ‘shadow inventory‘ in the real estate market, inventory comprised of all the foreclosed properties still being held by the banks and not yet released into the market for sale.
A good friend of mine who personally knows V.P.’s and Presidents of banks because he has an extensive real estate practice was told by two bankers independently, ‘if we put all our foreclosures on the market today we could financially take down New York’s economy.’ And that’s just one bank’s foreclosed properties. Is this true? My friend heard the same from bankers in southern Connecticut. Again, exaggeration? Just a turn of phrase? Time will tell. What does matter, however, whether they are bankruptcy driven foreclosures or non-bankruptcy foreclosures, people are walking away from their homes in record numbers.
We have at least three takeaways from this:
- Your clients still have to live somewhere.
- This is a real boon for the rental market and landlord/tenant practices.
- This will force very interesting migration patterns throughout each state, regions and the country.
How will you have to adapt your business? As people go to rental living, the transient nature of this lifestyle clearly will impact how people engage service providers as well as their long term relationships with these providers.
A transient and mobile lifestyle changes your client’s center of influence and stability. People go from choosing legal service providers based primarily upon their own geographical location to choosing their service providers in spite of their own geographical location.
Let me give you an example:
Nancy Nomad and her husband, Gideon Globetrotter, need a trusts and estates lawyer. They currently reside in Houston, Texas. Their home is foreclosed and Gideon’s new job takes them to Austin where they become renters.
Gideon is by no means secure in this new position. He has a one year contract for work but no guarantee of renewal. Nor does he and Nancy have a home they own. He is eying a job in Dallas which may provide him more pay and better security and will open up within the next year. They both had a previous relationship with an attorney in Houston and they really liked her. They don’t want to lose this relationship because of their move.
Providing the lawyer utilizes technology to keep the relationship, such as a Virtual (online) Law Office, they don’t have to. If the provider doesn’t have the means to address his clients’ new migratory patterns and transient living, he loses them. Chances are Gideon and Nancy will choose a lawyer who provides this connection and stability in their unstable world, a lawyer who can work with them wherever they locate.
If their Houston lawyer can service their legal needs in Austin or Dallas, neither the lawyer nor Gideon and Nancy have to lose the relationship with the other. A transient client wants the stability of the same service providers just like their phone, cable, and electric. The want portability. Legal service providers are no exception. Stability and long standing relationships will come to mean much more in their unstable world.
Let’s add another statistic into the mix: 27 % of people in the United States have no landlines in their home and are strictly cell phone/smart phone users. How many of you have already made the switch from landline to cell phone for both home and office? (and look at the ethnic breakdown possibly further supporting transient behavior and maybe a socio-economic reality.) My husband insists we keep a land line and I don’t object because it’s part of my cable/internet bundle. However, my business is strictly computer and smart phone and I know many others are switching to smart phones.
So, let’s go back to Gideon Globetrotter and Nancy Nomad. He’s transient with his job and residence. What are the odds they are going to hook up a landline and spend this extra money with every single move… unless it’s part of their cable/internet bundle? And even if this were the case, they don’t really want a new number with every move. It showcases their lack of stability with the job search, too. The only consistent number is their cell phone.
This switch to strictly cell phone/smartphone is going to increase. Why is this statistic important to you? Because without landlines, people are not part of any phone book. If they are constantly moving, they are certainly not part of any geographical based phone book. They don’t need the phone books or any type of paper directory, either. If they have smart phones they are quite capable of accessing any information they require through their data packages available through their smart phones. It is reliable, updated and a constant in their unstable lives.
Where Will Potential Clients Find You?
Less and less in any paper directory or publication.
If they are going to learn about something or someone they are going on the internet, asking family and friends, going to their connections on Facebook or Twitter for referrals to help them get started with their search. They will read your blog, websites, online reviews about your service. You should also note: while they’re looking through these reviews they are getting hit with targeted advertisements for other similar products or services such as yours. The internet has become one constant in their ever-changing world.
What About Print Newspapers?
The majority of young people don’t get a delivered print newspaper. Will they read the print edition online? Yes. Right now it’s free but may not be for much longer. Will they pay for a print edition? Quite possibly.
I’m not going to jump on board with ‘all electronic news will be by paid subscription.’ That’s not a sure thing by a long stretch and if the majority were to go paid, the breakouts that stayed free would grab a lion’s share of readership while supported by advertisers. There will always be checks and balances in delivery of information.
There is, however, something much more telling in this demise of physical newspaper readership. If the physical newspaper is gone, where will lawyers place their traditional print advertising dollars? On line, of course. But how?
Answer: There will be regional or national news delivery agencies which will create hyperlocalized editions of their internet publications. Their advertising will be targeted to a specific demographic community and the advertisers will benefit from this more defined audience. Even if it’s not lower in cost for the advertiser (which it really should be given the reduction in costs to produce) it can still be worth it because the advertiser pays only for the audience they specifically want. (And in doing so, they hasten the demise of the print publication.)
I experienced this recently when I responded to an online contest for my son. I was asked for my zip code. I was then brought to my state senate seat’s voting district’s online news edition created by a national news agency. (How interesting they divided the editions by voting district.) The vendors supplying the prizes for the contest were local to the voting district. Every district edition had the same contest for their local vendors. It was hyperlocalized targeted online content.
Hyperlocalization of online newspapers will be very big. While I’ll miss my Sunday paper, I have already transitioned 95% to online news anyway. The rest of the country will simply be forced to whether they like it or not. So, I ask you rhetorically, where are you going to spend your advertising dollars if the physical newspaper no longer exists? If Nancy Nomad and Gideon Globetrotter are your potential clients and they are transient within your jurisdictions(s), they’ll be accessing hyperlocalized online newspapers and content to learn what is available in their ‘new’ (albeit, temporary) home. They will not be subscribing to print newspapers and canceling and resubscribing with every move. Their trusted companion is their smartphone supplying the information they need when they need it and traveling with them wherever they may reside.
Gideon and Nancy will also be accessing Google Places – the internet equivalent of the yellow pages. Google Places works off of the key word search and is analogous to you looking for ‘plumber’ in the yellow pages then scrolling down to find a plumber based upon the plumber’s proximity to your location. As a solo, you should seriously investigate Google Places and do so soon.
More food for thought: if your potential clients are increasingly giving up their landlines and going with smart phones which allow them to access the internet for contact information, to receive and send email and texts while avoiding voice mail (the average voice mail sits for more than three days before being heard), how do YOU plan to reliably communicate with your potential clients going forward? I don’t have the answer for this right now because there are many confidentiality issues to be worked out. Obviously, one serious choice is through a client portal within a virtual (online) law office.
What you must consider is this: what we’re professionally comfortable doing may be trumped by our clients’ needs and technological capabilities. They may prefer texts over phone calls and e-mail over regular mail simply because they don’t have a landline or a permanent mailing address or the post office has switched to alternate day delivery thereby rendering it untimely. (Note: our post office is not delivering our mail due to massive snow piles blocking our mail boxes. The physical post office is overwhelmed with everyone in town trying to get their mail. Do you want your critical legal documents and invoices to be part of this weather-driven fiasco? Neither do your clients.)
Bottom line: If you don’t have a smart phone which has all these communicating abilities, I suggest you start shopping for one. Also be prepared to create policies regarding confidentiality and texting with your clients. Remember, it’s not just about you saying, ‘I have an office line and I’m not giving out my cell phone number.’ It’s about what the client uses to communicate and how they expect to communicate with their attorney! Younger lawyers may be very comfortable with this development. However, other lawyers need to give serious thought to this, too. You may have to consider getting a separate smart phone just for work so you can give out the phone number while preserving your personal phone! Sounds far-fetched or not feasible? The tail wagging the dog? We’ll see.
What About $5 and $6 per gallon gasoline?
Forget that it adds to an already over-burdened household budget, but your clients are going to be less inclined to come to your office unless it is absolutely imperative. They are going to be budgeting their travel because of the cost of gasoline and parking as well as the cost in time they can ill-afford to spend on non-income producing activities. If they can handle a matter over the internet with a lawyer who provides this option, they are going to be much more inclined to do so. The price of gasoline must be factored in to your decisions as a legal service provider because this problem is not only not going to go away, it’s going to get worse. Of course price due in part to market manipulation. However, there is also a much bigger factor at play – other emerging markets are demanding oil and and they are going to get it. We’ll be paying a premium for a more limited supply and there’s no getting around this. Then add on increased state taxes on gasoline to cover budget shortfalls and you have a serious problem. Your clients are going to demand you make working with you much easier or they will find someone who will.
What About Social Media:
Social Media is no longer about what you choose to do or choose not to do. It’s about where the potential client expects to find a service provider when they look for a service provider.
Years ago, before the internet and cell phones, if you were in a reputable business customers expected to find you listed in the Yellow Pages. It gave your business the perception of legitimacy. Every home had their local yellow pages. So, Yellow Pages sales representatives offered you one line in the phone book for free when you secured your business phone number and this helped their cause which was to promote they had everyone and every business listed which in turn generated more paid advertising.
Today, the internet is the Yellow Pages. Your web presence is your Yellow Pages listing, a must have which gives your business the perception of legitimacy. But that’s not all. Potential clients expect to find you listed on all reputable sites, including Facebook. Do you remember years ago progressive companies listed their website URL along with their regular contact information? I remember thinking, ‘what is this?’. Now those same progressive companies no longer feature their website url prominently but feature their Facebook page url prominently. The goal is to drive customers to their highly interactive site within a community where their prospects congregate. There they can learn more about people who have expressed interest in their product/service and interact in real time. And it’s a great advertising tool (which is for a separate post). It is all about engagement. Facebook is still young but even in its relative youth it has managed to change how we are conducting business and engaging our potential clients . It offers a different type of legitimacy in this ‘connected’ world. It would be wise for you to have a facebook page for your business and to learn how to use it correctly.
One Final Thought:
It’s a sweat equity marketing world we now live in. Get ready to sweat if you want to grow your business.
Two hundred and sixty years ago we were a new country. Ninety percent of all businesses were sole proprietorships. There were no large employers. Entrepreneurs flourished as they created their own prosperity by innovating, filling a void in the community, solving problems with hard work – sweat equity. No one could write a check to have someone else create a persona for them. People had to market themselves to their neighbors by being honorable, doing good work, delivering promptly on a contract, having reliable products and services and when they handled their business well, it often led to prominence and respect in the community. There was no outsourcing of one’s reputation. Today our world is demanding we sweat again, as we can no longer avoid engaging personally when building our practices. We must use the tools available to us and we must engage the way our potential clients want and need us to engage.
We are also going through a major societal change: millions employed to unemployed and then a large percentage to self-employed. And when someone becomes self-employed they rarely return to working for another. This is a radical change. It will forever impact how business is conducted.
While change is nothing new, the speed with which change is happening today is new. What is changing and the scale of the change is new. There is no running from the change taking place. There is no hiding, either. All we can do is anticipate it, embrace it, and run with it. Maybe some think they can stand still and continue to grow. I beg to differ. Welcome to 2011.
What do you think? How are you adapting your practice? Have you considered working with clients online, even just a small percentage of your client base, to get ahead of the curve?