Legal service productization — holy grail or rat trap?

The productization of legal services been touted as both the next great move forward for the legal industry and an unnecessary distraction–depending who’s weighing in or maybe even what day it is.

The issue was explored in depth at the iManage Legal Innovation and Technology Summit (LITLS) in September, which brought together over 50 large law firm chief Innovation officers, chief knowledge officers, and Chief Information Officers to explore key strategic topics facing large law firms today.

It’s a hot topic at law firms both large and small, according to research conducted by Janders Dean for the event, as over 70% of survey respondents indicated their firm was moving toward productization of legal services.

But there are disconnects between what the market says about such productization and how it’s acting as represented by what respondents said about the blockers to effective productization:

• 60% said a lack of vision inhibits productization
• 47% said a lack of collaboration
• 44% said a lack of skills
• 45% said a lack of commercial awareness

Although 70% of firms said they were engaged in productization only 10% said they will need more product management roles in the future for getting such new products off the ground. There was a general feeling expressed by the attendees that law firms today do not understand the discipline of product management, its important role in how ideas become products, and that augmenting skills in this area will be a key to facilitating effective productization.

Other discussions at LITLS also shed some light on what kinds of firms would benefit from productization and which ones are considering it. Anecdotally, firms with strong brands and advisory functions that tend to be involved in delivering more bespoke services and advice said they view productization as a lower priority than firms involved in more transactional, commoditized legal services.

Another factor that seems to drive an interest in productization is a degree of competitive pressure, especially from non-legal providers. As evidenced in the above infographic, we found that firms experiencing new forms of competition are more actively seeking productization as a way to counter that than firms that are not.

This topic was further analyzed in the Design Jam sessions held during the LITLS event. The group whose presentation garnered the most interest was the one that focused on changing law firm mindset to understand that prioritization and product delivery is a discipline well understood outside of legal, and at this expertise needs to be brought into law firms in order for them to succeed at their efforts.

The group further proposed a set of criteria that should characterize a productization initiative:

• Start with a relatively small group of 1-5 staff, including the key disciplines of product management, user experience design, client listening, and technology
• Additional skills to consider include dev/ops (if the product will be a SaaS service), software architects if the product is a software application that requires good performance, knowledge creation of the product requires packaged knowledge and more
• The initial focus should be on current service delivery to identify opportunities for productizing existing legal solutions
• Base the approach on data analytics and metrics (in terms of building a business case for the solutions) rather than opinion or non-quantitative means, and industry standard product development frameworks and best practices be used
• Target quick wins with productizing existing products or services to show the process and success to get sponsorship and build from that initial success

The team identified blockers to successful productization including:

• Gaining executive buy-in
• Making this model work in the partnership model
• Getting lawyers engaged
• Change management
• Making work in a law firm attractive to product experts (needed to staff)

It also identified some strategies to overcome these blockers, including developing a well-executed strategy that would target a significant business impact of 10-15% of revenue resulting in an increase in profit of 20-30%.

So, in summary, productization is viewed as a big opportunity especially in firms that provide more transactions and commoditized legal services in geographies such as Europe and Asia/Pac where competition from non-legal providers is most intense. Competency in legal service productization requires skills and best practices from other industries along with analytic frameworks and metrics to prioritize and measure the impact.

Firms should start small with a focus on identifying existing legal services that are a candidate for productization and focus on an initial success to demonstrate the success of the initiative and increase firm buy-in. They need to earn the right to continue or increase the initiative.