Competing Against the Walmart of Legal

Episode Notes

Transcript

Conrad Saam: Hey, guys. This is Conrad and Gyi, kicking off Lunch Hour Legal Marketing. You may have noticed although I don’t know if you did, but Gyi and I certainly did. Last time we did the podcast, we were a little off. We shifted our cadence and it felt a little off. It was really fascinating. So, if you’re in a podcast, my thought is make sure that you keep the regular cadence because it really works. But we also talked about jobs and how hiring is so difficult. Gyi, what was your most memorable, weirdest, earliest job?

Gyi Tsakalakis: Well, earliest job was soccer referee. I had a lot of jobs and I started really early. Well, I guess I thought it was early. Maybe people start working earlier than me, but 14 as soccer referee. I had a paper route.

Conrad Saam: A paper route.

Gyi Tsakalakis: Yeah.

Conrad Saam: Could you explain that for a half of our users what a paper route is?

Gyi Tsakalakis: I woke up very early and delivered physical newspapers to people’s doorsteps.

Conrad Saam: That is awesome. That sounds very 50s.

Gyi Tsakalakis: I know. I had a lot of — 

Conrad Saam: Was it on a bicycle?

Gyi Tsakalakis: I was on a bicycle. I was a valet. I worked in a Foot Locker. I worked in auto parts factory.

Conrad Saam: What did you do in auto parts factory?

Gyi Tsakalakis: I made auto parts. I worked on stamping press. Yeah. Those are some that come to mind for me. How about you?

Conrad Saam: My earliest jobs, and the reason I want to bring this up is we’re hiring right now. You and I talked about hiring last time. One of the things that we look for in our hires is having a terrible job in your background, like early on, because you tend to appreciate the good jobs that you do have more if you’ve had that awful job. My rough jobs were I was a — I dispensed gasoline in New Jersey, which is something in New Jersey and Oregon, you are not allowed to pump your own gas and so I worked at Texaco and pumped gas. And the other rough job that I had, a really rough job which makes me glad I have my education, et cetera. I was a midnight janitor at a very, very low-end restaurant on a highway in New Jersey. That was not a great job.

Gyi Tsakalakis: There you go. Learned something new about us.

Conrad Saam: Alright. So, today, we’re going to be talking about — today is going to be a big episode and you’re probably not going to leave this episode feeling really great about the practice of law. We’re going to talk about LegalZoom, and their very recent announcements. We’re also going to get into the North Carolina bars spat with Google. And I also want to remind you if you’re listening to this the day it came out, that will be August 25, we are right in the middle of Bedlam. If you would like to join us tomorrow, August 26, bedlamconference.com. If you will, we’ll give you a half off if you use the code half to check out for tomorrow’s session of Bedlam. But now, it’s time for the music.

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Intro: Welcome to Lunch Hour Legal Marketing. Teaching you how to promote, market and make fat stacks for your legal practice, here on Legal Talk Network.

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Conrad Saam: Alright, welcome to Lunch Hour Legal Marketing. But before we get started, we wanted to thank our sponsors as always, Alert Communications, LawYaw and Clio. And this time, we’re not going to spell out Clio.

Gyi Tsakalakis: And speaking of Clio, now it is time for the Legal Trends Report minute brought to you by Clio. When comparing caseloads on a per lawyer basis, firms using Client Intake and CRM Solutions saw a 16% more case work in 2019. In 2020, firms using Client Intake and CRM saw over 20% more cases every month from February onward. So, what’s that tell us Conrad?

Conrad Saam: I mean, so the question that I would have is whether or not these are causal, right, is it just because firms that care about things and think about things and don’t want to drop the ball are getting more casework or is the CRM actually making a difference?

Gyi Tsakalakis: That’s fair.

Conrad Saam: So, by the way, I will make that pause it and then I will give you the opinion. You know, I am deep, deep, deep into CRM, like that is one of the things that we have really pushed aggressively. And the reasoning, there’s a bunch of reasons. One, with really well configured CRM, you can actually measure your marketing much more effectively, and you’re no longer talking about leads, you’re talking about intakes, you’re talking about new matters. If you tie it altogether really carefully between intake and CRM and your matter management, you can even talk about revenue and you get the things like ROI and stuff like that. So that helps. Two, because you are looking at everything, your data is much more accurate, right? And so, the ability to have really comprehensive data — and you know this, Gyi, because most of the time law firms argue with their agencies about whether or not the leads are good, right? If you’re using CRM, you already know the answer to that question because that path is completely taken.

Gyi Tsakalakis: So, here’s my thing. I think all the lawyers saying is all valid and has nothing to do with this. I think it’s literally that the people using CRM are staying in better contact with people that can become clients for them.

Conrad Saam: Okay. So, that goes to my final point, where like there are these little things that you can do where you can make a 1% improvement here and a 2% improvement there. And so, the client experience is better. The prospect experience is better from a CRM perspective, which means your conversions go higher, right. My gut tells me that most people are not getting as much out of the CRM, my first two points that I made. But there is value in improving those tiny little metrics and making sure that the user experience is that much better.

Gyi Tsakalakis: To learn more about these opportunities and much more for free, download Clio’s Legal Trends Report at clio.com/trends. That’s Clio spelled, C-L-I-O. We actually are going to spell Clio again. And now for one of our favorite recent segments, Dear State Bar Regulator. North Carolina Bar in particular, I am very sympathetic and grateful for your concern about legal services consumer privacy and legal ethics with respect to recording phone calls. Conrad, why don’t you set us up what we’re talking about here for a second.

Conrad Saam: Sure. So, Google’s local service ads, which all of you should be familiar with by now. One of the things in terms of how they work is in order to determine it was actually a lead, Google records that phone call and use the AI to increasingly get accurate about whether or not this was a real lead for the law firm. And so, the North Carolina Bar is concerned about privacy issues here.

Gyi Tsakalakis: And so what is the North Carolina Bar say in this context?

Conrad Saam: So they’re specifically talking about whether or not there is a concern that third parties could have access to this information.

Gyi Tsakalakis: Did they say lawyers in North Carolina, you cannot use LSAs because it’s recording.

Conrad Saam: So, this is an opinion, right. So, they haven’t been specific about whether or not this moves forward, right. You’re the legal ethics expert on this.

Gyi Tsakalakis: Yes. No, no, no, no, let’s also — 

Conrad Saam: That’s actually really careful.

Gyi Tsakalakis: Let’s put this claim.

Conrad Saam: Of the two of us, you know a lot more about legal ethics than I do.

Gyi Tsakalakis: I am slightly, I’m like a half step a higher bar. No, but seriously, we do not purport to be legal ethics experts, but, you know, the intersection of marketing and technology and law practice and ethics is definitely in our world. And so, you know, again, as I said at the outset, I’m extremely grateful that the bar is concerned about this. But if the solution is lawyers can’t advertise online or lawyers can’t record phone calls period, that’s where I take a little on bridge and I think we need to be a little more nuanced about this. So, what are some things besides just an all-out like, look, you can’t — because again, if you’re concerned about recording in general, there are all sorts of other marketing technologies that are probably doing some form of recording, you know. I didn’t think of just like some of the technology is just like hey, access microphone to show ads, right? That’s like quasi form of recording, Alexa. I might be wrong, but I believe they’re recording. So, what can we do beyond just an all-out ban on this stuff and pros and cons of some of this? Just stuff that lawyers should be thinking about if they’re considering using it. I’ll guarantee you right now, there’s a bunch of lawyers that well, even not a bunch, but if there are at least one lawyer listening to this that’s running LSAs, they might not even realize that this is a thing.

Conrad Saam: Well, I’m absolutely certain they’re not. I mean you’ve spent tons of time talking to lawyers about local service ads. This was one of the things that came up two or three times. I mean, I’ve talked to, I don’t know, a hundred lawyers about LSAs, individually one-on-one. This has come up two or three times, right. And when it came up, I kind of saw this problem arising. I think the nuance with law is fascinating because the notification about a call recording is actually a bit of a marketing problem. And I’ve had these conversations with criminal defense lawyers, that they don’t want to do the call recording, and I fight with them because I’m a marketing person. But there’s a very good and valid concern.

Gyi Tsakalakis: Can it be used against them? Yeah.

Conrad Saam: Well, I mean, it’s not even a canopy use. It’s just if I know that I want to talk to an attorney about the fact that I slept with the babysitter, and the first message I hear is that we’re recording this. Maybe not so much, right?

Gyi Tsakalakis: Right.

Conrad Saam: Like I think it’s a genuine concern on the law firm from a conversion perspective. I honestly don’t see this as a genuine concern. I’d be curious what your perspective is, Gyi, that like because Google is recording this, they’re making that content available to other third parties.

Gyi Tsakalakis: They’re not making it available but it — 

Conrad Saam: But they could, right? That’s the argument.

Gyi Tsakalakis: Could they be subpoenaed? And if it is subpoenaed and Google turns it over like what do you do? And then you have questions of admissibility and attorney-client privilege and all that kind of stuff. You know, look, again, I think that there are genuine concerns here and there are genuine issues. I guess, you know, this is a segment Dear State Bar Regulator. My issue, like it is with so many of these State Bar regulations, is that the rules and the mindset, the way we think about these issues needs to catch up with the technology. Because the issue is you can’t use call tracking numbers because the call tracking company tracks that you called this law firm, right? Because forget about call recording. Just think about it in terms that you get called detail reports, you’re a marketing person, just to do attribution for calls you need to know the number that called so you can do sourcing to that. That creates the same problem.

Conrad Saam: Yeah. Yeah, like why did you talk to seven attorneys?

Gyi Tsakalakis: Right. Why did you call these criminal defense lawyers? Was it because you slept with your babysitter?

Conrad Saam: Right, right.

Gyi Tsakalakis: Which is such a weird example that you brought up.

Conrad Saam: I’m not sure as we’re recording this whether or not I want to talk about sleeping with the babysitter or adding an extra zero to my tax returns, you know.

Gyi Tsakalakis: Well, you had an interesting idea. What if you had a whisper message that says this call is not being recorded.

Conrad Saam: I love this idea. So, this like opens up a whole bunch of stuff that I — You’re opening a package to like most of your answering services are horrible, right. And by the way, like Eine Kleine Nachtmusik, right, is not like the sleepiness, the lullaby, like don’t put people on hold on a lullaby for like — why you’re doing that? But like why are we law firms using these as an opportunity? So, A, don’t put people on hold. B, if you put people on hold, make it awesome, right? Make that phone call experience awesome. I love the idea. Your criminal defense attorney and you want to distinguish. We talk about this all the time. You need to distinguish yourself. Most of the automated phone experience is either terrible music, a terrible phone tree, right, none of it stands out. I would love to hear criminal defense firms have their message say, “This call is not being recorded. Be very careful about whom you talk to and how you talk to people. We are here on your behalf and we take this stuff seriously, regardless of whether or not you hire us as a law firm.” Like, I would love someone have a gumption to do that.

Gyi Tsakalakis: Yeah, you know, again, this segment is not long enough for you and I to lament the sad state of Law Firm Client Intake. But, for me, I think about through the lens of the consumer. I think it’s an interesting competitive advantage. For me, it’s like get the potential client on the phone with whomever is going to help get clarity about whether they need to talk to a lawyer, whether the firm can help them, how the firm’s uniquely qualified to help them, stop their search. Because otherwise, if you don’t have the time, I mean, you just don’t have the time, you start to play whisper messages that are long. People are going to be like, forget that firm. Like that’s cute, they’re moving on.

Conrad Saam: All right. Let me put you on the spot with a difficult conundrum. I don’t have the right answer to this.

Gyi Tsakalakis: Okay, good. I’m glad we’re running out of time.

Conrad Saam: And now from our sponsors. No, here’s a question. Most people call in to a law firm, want to talk to a lawyer. And the data that I got when we did this in detail, this is four, five years ago, was 9% of the people who call them to a law firm trying to talk to a lawyer actually talk to a lawyer. The problem is if you try and fix that and stand above the crowd by connecting someone alive transfer to that lawyer, the Experience looks like this. “Hi, Mary. That sounds like a really interesting matter. I’m going to try and connect you to Jim Jones,” right? And then you put Mary on hold while you try and track down Jim and get Jim to finish his sandwich really quickly so he can talk to Mary. Now, Mary’s on hold. She’s annoyed. Like you’re creating another problem here, right?

Gyi Tsakalakis: Yeah, I would not do that. I can’t paint with a broad enough brush because there’s different factors; solo, small firm, like lawyer time. Generally speaking, I believe in this. You have to have a sophisticated person doing the initial screen, because if you’re a personal injury lawyer and someone’s calling about a criminal matter, they should immediately be, “Hey, we don’t handle those types of cases. You need to talk to a different law firm.” And that can be handled by someone that’s not a lawyer. And then the other part of it is the hot transfer aspect, which in some firms that can work really well. Great experience, moves fast, you got 30 lawyers at your firm and somebody’s always holding the baton to answer calls, great. If you can’t do that though, like you said, you’re creating more frustration on both sides by trying to do the hot transfer. Just take the message, schedule the call, set the expectation of when the lawyer is going to call them back. And lawyers have a policy that somebody that’s qualified to do the intake, whether it’s a lawyer or an intake specialist, is going to do the intake within 24 hours. So, “Hey, we got your message. Thank you for your call.” Set the expectation of when they can receive a follow-up and then carve out time. Somebody at the firm has to be carving out time on a daily basis to be able to respond and handle intake appropriately.

Conrad Saam: All right, let’s pay some bills.

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Gyi Tsakalakis: So, every week, we beg, you, dear listeners, to let us know what you want to hear about, to give us feedback. We really do mean it though. Hit us up on Twitter or LinkedIn with the hashtag HLM. You probably can find our contact information floating around and go to our websites and fill out the contact form. Let us know. If you haven’t already, please do leave us a review. It really helps not only the algorithms, but helps us understand what’s resonating with folks, and what topics to cover, guests, all that kind of stuff, and it helps more people like you find the show. So, please do go leave those reviews.

Conrad Saam: All right. Now I promised that we are going to talk about everything in the news, and the big thing in the news — And by the way, this is not going to be uplifting for 99% of you. LegalZoom is in the news in Arizona. Gyi, can you give a quick overview of what LegalZoom is up to in Arizona?

Gyi Tsakalakis: Sure. So, if you want to read a pretty good overview article on this, Lyle Moran has contributed a nice article at ABA Journal titled LegalZoom is pursuing an alternative business structure license in Arizona. The TLDR here is that, now, nonlawyer entities can hire lawyers to give legal advice. And so, LegalZoom, not a law firm, is applying to be able to hire lawyers to provide legal advice, which sounds very familiar. I feel like some other company had tried to do this at some point.

Conrad Saam: Yeah. So, what Gyi is referring to is AVO’s smackdown by multiple state bars when they were accused of, I’ll say accused of, fee sharing on this, their product, where they were really trying to bring lawyers and have the payments go through AVO really rubbed the state bars the wrong way. I believe I’m right on this. I should know this history more of. But that has been completely scrapped, correct.

Gyi Tsakalakis: I have no idea. But for a long time, you and I, or me and other people, like this has been a — we’ve known this storm is coming. Like, this has been — This is like, we know it’s coming. The question is when, and the answer is it’s here.

Conrad Saam: I mean the interesting thing is the ruling came out in Arizona Supreme Court. They killed the Rule of Professional Conduct 5.4 a year ago. It’s taken a year for this to happen, which honestly to me seems like a long time.

Gyi Tsakalakis: Well, they want to get their ducks in a row. So, here’s the thing. I think law practice why this is huge news, but why are two marketing idiots caring or talking about this? What’s this really mean to you?

Conrad Saam: I mean it depends how far this goes from — By the way, also, Utah, right, so, Rocket Lawyer has done similar work in Utah. Utah has a sandbox and ethics sandbox, they are regulatory sandbox, sorry, where they’re exploring these things. Rocket Lawyer is part of their sandbox. Although I did note that LegalZoom for whatever reason is not interested in Utah’s sandbox yet. I mean, move outside of legal, most doctors work for people who are MBA’s, not MD’s, right? And so, it’s almost anachronistic that the legal industry is run by the legal practitioners in most cases, right?

Gyi Tsakalakis: And you have taken a more philosophical response than I was expecting. I’ll tell you my kind of view on this. You know, I’m looking at the article. LegalZoom Legal Services said in its application then its first year of operation as an Arizona ABS, it intends to undertake three key action steps. Launch innovative low costs small business solution for Arizona small businesses, fulfill attorney led trademark needs for small businesses and provide access to attorneys for small business and estate planning advice and legal services through a monthly membership plan. So, me as a marketer, if I’ve got a client in a small law firm client in Arizona, that provides low-cost small business solutions or trademark needs or estate planning advice. Boy, a big competitor just came into the mix.

Conrad Saam: I mean this is kind of worse in having Morgan and Morgan put up a sign post outside your office. You know what the valuation for the LegalZoom is?

Gyi Tsakalakis: I do not off top of my head.

Conrad Saam: They IP owed in June for over seven billion dollars.

Gyi Tsakalakis: I’ve seen their commercials on TV.

Conrad Saam: There’s some pretty big money behind this. This is a massive well-funded competitor. And I mean this is just LegalZoom. There is a lot of rumblings about big four accounting firms getting involved in this as well, right?

Gyi Tsakalakis: Right. And this is just, you know, small business trademarks estate planning. This is just the tip of the iceberg. They’re coming in. 

Conrad Saam: So, LegalZoom said they did 10% of business formations in the country last year, 10%. That’s huge market. I mean, think about it. A distributed industry like Legal. I mean think about it, why the distributed industry? Like what restaurant chain has 10% of revenue from consumers? This is a big deal. I mean the interesting thing, Gyi, is the tip of the iceberg. I think that the bigger picture in marrying lawyering by lawyers to documents, right, business formation is by definition a lot of paperwork, right, and there is less — and I’m probably going to offend all the business formation lawyers out there. But there’s less kind of interpersonal human work than if say you’re doing a divorce case, right? And so, the interesting thing to me is LegalZoom success I think has been limited by the fact that they don’t have lawyers. Like they just can’t get into some parts of it. Whereas now, you throw the lawyers actually working for LegalZoom to deliver that service, like that changes the game dramatically from a practice area perspective.

Gyi Tsakalakis: Right. And so, again, yeah, I’m just sitting there. I’m thinking about either own a law firm that does this kind of work or I’m advising a law firm that does this kind of work. And I start thinking about options, right., and so you’re already alluded to a couple of the options. I mean, option one is you just get out of this practice area altogether, which again I think is the tip of the iceberg. I think a lot more practice areas can be impacted. Two, you can go work for LegalZoom. You know, question, can you make the economics of your firm work as an employee of LegalZoom? I don’t know the answer. I think there’s going to be a long painful process of exploring whether that’s even feasible. And three, and this is the one I would focus on, and I think if you’re listening to this and you’re in those practice areas or you’re concerned about this, you better find a way to position yourself against LegalZoom, because LegalZoom is good. They’re going to have the reach.

Conrad Saam: And the brand.

Gyi Tsakalakis: And the brand. Everybody’s going to know, go to LegalZoom. So, how do you uniquely position you? Why are you a better option than LegalZoom? That’s what you got to ask yourself. And so, you know, you got to think about you. It’s back to like Marketing 101, unique selling proposition, unique value proposition, bigger is not better. Maybe you now have to double down and you alluded to maybe there’s not a lot of human experience touch with working with business owners. Guess what? You better triple down on that human experience and hope that you can compete on that kind of stuff, building relationships with clients because that’s where I think LegalZoom is probably not going to invest in, right. LegalZoom will make this extremely transactional. In fact, if you look at what some of the messaging in the article, their whole pitches we’re not actually displacing lawyers at all. We’re just giving lawyers a portal to access more of the market. Now, that’s fine. Access more of the market in a way that’s profitable for a small law firm that does this stuff. That’s the question I don’t know the answer to.

Conrad Saam: So, this goes back to — I think this is a question we raised last week. Is technology really bringing more people into the legal market? So, that was a technology question. This is like a business efficiency scale question. If I were trying to make this sound very appealing to the legal industry and I was the PR person at LegalZoom, I would be really pushing, and you guys need to think about whether or not this is something that you want to do or have to do. Can LegalZoom’s efficiency and scale open up a massive new market and bring legal? I mean, that’s the argument of the bars, right? We are getting more access to more consumers, right? And so, that’s a good thing. Like I won’t even suggest that that’s not a good thing. Is there value in that? Or on the ugly side, does this just become Walmart squeezing all of the players for profit? And so, you are making up for lower margins with massive volume. Do you want to become a cog in that wheel?

Gyi Tsakalakis: Yeah, and I think for me, you know, again, brass tacks. What would I do? One, I’d be positioning against this. Two, I’d be exploring the economics of using let’s take LegalZoom at face value and say can this access to this untapped market become, call it a loss leader, or call it a lead generation tool to upsell on other services may be. Can you get clients and maybe it’s an unbundled offer something that you can offer through LegalZoom, build that relationship and then own the relationship after LegalZoom? But, there’s a big but here, which is the concern of the regulators, the concern of a lot of lawyers. It’s a concern that’s expressed in the article. When the financial interests of LegalZoom take precedence, the clients become the ones that pay the price. Is LegalZoom going to put pressure on you to handle a matter or a client in a way that you wouldn’t handle it but for your relationship with LegalZoom? And that’s a legitimate question. That’s a legitimate question I think for all of us, but particularly lawyers did decide to try to work with LegalZoom getting mindful of that.

Conrad Saam: I mean, so think about that, and I want to wrap with this thought. But think about the doctors who now are working for hospital systems, increasingly working for hospital system. You talk to doctors, their number-one complaint is that they are given their specified amount of time they get to spend with a patient. And the less time they spend, the more money they make, right?

Gyi Tsakalakis: Until medical malpractice lawyers sue them for substandard care.

Conrad Saam: I mean that’s what’s happened in the medical profession, and how do you become a better mousetrap there, right? So, fascinating. By the way, we should keep working on — We usually try and end on a positive note, and I think we’ve come up like, oh, for seven.

Gyi Tsakalakis: Do we?

Conrad Saam: I think at the end we always know that we should be ending on something, but like I feel like we’re talking to the small restaurant or talking about Olive Garden moving in across the street, and whether or not they want to take their slicing and dicing skills over to fill out the buffet of Olive Garden. There’s a lot to think about, everyone. I don’t know that this is uplifting.

Gyi Tsakalakis: Well, here’s my positive note.

Conrad Saam: Go.

Gyi Tsakalakis: Thank you, listener, for listening. We really do appreciate it. As always, please, if you just landed on this, please do follow, subscribe, like, get involved on the hashtag, leave some reviews and thank you truly for listening and until the next episode of Lunch Hour Legal Marketing. This is Conrad and Gyi saying farewell.

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Outro: Thank you for listening to Lunch Hour Legal Marketing. If you would like more information about what you heard today, please visit legaltalknetwork.com. Subscribe via Apple Podcasts and RSS. Follow Legal Talk Network on Twitter, Facebook, LinkedIn, and Instagram and/or download the free app from Legal Talk Network in Google Play and iTunes.

The views expressed by the participants of this program are their own and do not represent the views of nor are they endorsed by Legal Talk Network, its officers, directors, employees, agents, representatives, shareholders, or subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.

 

Podcast transcription by Tech-Synergy.com

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