Over the past 40 years, the advent of the microchip has commoditized many businesses and services. Moore’s Law, defined as the doubling of microchip power every two years, led to the powerful capabilities we find in today’s computers, Internet and Smartphones. While the microchip has fundamentally transformed society, giving us unlimited access to information and the ability to instantaneously communicate like never before, it renders many businesses and services as obsolete.
Those of you who are around my age (mid-50s) may remember a time when nearly every neighborhood strip shopping center had a travel agency, video arcade and Blockbuster. The microchip commoditized those businesses so that they were all replaced by something faster, more convenient and cheaper in the form of travel websites, home gaming systems and online streaming video services. I’m sure you can think of dozens of other businesses that either have gone bankrupt or changed substantially because of commoditization.
These same forces affect legal, tax and financial professional practices. Why pay John thousands of dollars to manage my investment portfolio when I can do my own research online and trade stocks for $6? Instead of engaging Sally’s firm to do my taxes, I can do them for free on the Internet. Why pay Craig a small ransom for an estate plan instead of logging onto Legalzoom? When clients can find our services for pennies on the dollar, how does that bode for our future?
Know this, not only do I believe that the future of your estate planning practice is viable, but also, I believe that it can be exciting, fun and lucrative. For that to be true, however, you have to understand what your clients seek and what they’ll pay handsomely for.
In this and in future columns, I’ll share with you how you can break out of the commoditization trap by transforming your professional life into what I call a “value-creation practice.”
A Life-Changing Experience
I wasn’t always this certain of an abundant future. Twelve years ago, I almost quit the practice of law. I felt like I was working longer hours for the same or even less revenue. Our age of instantaneous communications seemed to leave my clients expecting results yesterday at little or no cost. While overhead continued to increase, charging higher fees seemed out of the question.
My waistline expanded because I stopped working out. My three daughters were then ages nine, seven and four – and I didn’t want to miss out on their dance recitals, taekwondo belt tests and Odyssey of the Mind Competitions. My wife and I became roommates as opposed to soul mates, communicating through cell phone messages. I lost the balance between my professional and family life. At the lowest point, I thought that there must be something else that I could do with my law and accounting degrees that wouldn’t be so draining.
Before giving up on a law practice that I had worked so hard to build, I enrolled in a program geared to entrepreneurs. One of the valuable insights I learned in my very first class centered on technology’s commoditization trap. That requires an understanding of the true definition of a commodity, which is something that’s interchangeable and uniform, such as raw materials (like metals) or agricultural products (corn). It’s sold in bulk because one unit of a commodity is indistinguishable from the next.
So applying this concept to a law practice, how do you differentiate yourself not only from what’s offered on the Internet, but also from your competitor down the street? You certainly can’t do it on price, nor would you want to try.
Focus on What’s Valuable
Instead, you must give clients what they find valuable. What exactly is that? Is it the same for each and every client? If not, how do you and your team systemize value creation inside of your practice so that your firm becomes known for providing uniquely positive client experiences that can’t be found anywhere else at any price?
You’ll note that I just asked how your team helps to accomplish these goals. An important element to work/life balance is that you can’t be the rugged individualist. I’ll review different methods to build a team engaged in supporting your firm’s value creation mission, leaving you to work solely inside of your unique abilities. Good things happen when everyone inside of your organization is being put to their highest and best use.
Finally, I’ll share ideas others have helped me incorporate to successfully market and package my wisdom. It isn’t enough to have the best practice in town. Somehow the word needs to get out. Most of us don’t have an unlimited budget to run advertisements in the paper or on television. But even if we did, how do you differentiate your services? We’ll explore that together.
Today, by the way, I run a successful boutique estate planning firm whose revenue is several times that of a few years ago. Last year, I enjoyed nine weeks off, pursuing my interests, which include family adventure travel and competing in triathlons, including Ironman events.
I hope you’re encouraged by my message and are eager not only to follow future columns answering these questions but are also willing to email me your own questions and share your experiences, both good and bad. Feel free to do that at email@example.com.