Turning Legal Services into Products

Episode Notes

Transcript

Dennis Kennedy: Welcome to episode 132 of the Kennedy-Mighell Report. I’m Dennis Kennedy in St. Louis.

Tom Mighell: I’m Tom Mighell in Dallas.

Dennis Kennedy: In our last episode, we talked about iPads, the current state of the tablet in general, and the third edition of Tom’s “iPad in One Hour for Lawyers” book.

In this episode we want to talk about a big idea for applying technology in some new ways. Tom, what’s our agenda for this episode?

Tom Mighell: Dennis, in this edition of the Kennedy-Mighell Report, we’ll be talking about turning legal services into product, something often called “productization.” In our second segment, we’ll discuss writing books about technology for lawyers and reach out to our audience to think about whether they might have a book inside of them; and as usual we’ll finish up with our parting shots, that one tip, website or observation that you can start using the second that this podcast is over.

First, let’s get started on our main segment, and that’s turning legal services into products or legal information into products. This is something that lots of other industries are already doing with their information. Some law firms are starting to take advantage of this, but I think, in general, the legal profession really doesn’t get this idea. At least not yet. At least not enough to really fully take advantage of it.

Dennis, I know you wrote an article about productizing the law in the July/August 2014 issue of Law Practice Magazine. It’s also called the “big ideas” issue, so those of you, if you haven’t read that, please go and find a copy. It’s a great issue. What got you interested in this topic and what do you mean by productization? I assume I’m pronouncing that correctly.

Dennis Kennedy: Yeah, I sometimes say productization. I guess that might be, I sometimes feel like I have a little bit of Canadian flair when I say it.

Anyway, it’s something I’ve been thinking about for a while because I think that when you look at consulting that there’s always this thought of saying, “How can I turn some of the things I’m doi

ng that are repeatable and are actually forms of information, how can I turn those into products that I can sell so I can have royalty income in addition to services income?”

I think the idea has always been out there in the sense of information products, and I’ve thought for a long time about whether lawyers can do something similar to that, so when asked to do this article and given a fairly short time frame to get it done in, this seemed like a good one to take a look at.

Also, I thought it reflected sort of the flip side of what we usually talk about, technology, because usually you’re talking about, “How can technology make lawyers more productive or help you do what you’re already doing better?” This is sort of saying, “How can I use technology to kind of create something new, to create new revenue streams and sort of apply technology in almost like the flip side of how we usually think of it?”

That’s sort of how I got to where I was going, Tom.

Tom Mighell: Before we get into the actual technology part and discuss some examples and what you mean by taking information, turning it into products, what I was thinking when I was reading your article was what’s the premise behind your idea? I assume that part of that premise is that law firms have a lot of information that they either don’t know how to monetize or they’re not monetizing effectively, at least according to today’s kind of evolving business models. Is that all there is to it or are we aiming squarely at the billable hour and something like that?

Dennis Kennedy: I think that, when I think in terms of the billable hour, you sort of think this way. I really like a guy named Alan Wise who writes about consulting and different approaches to professional services. He’s really big on saying if you charge by the hour, you sort of have two constraints.

One is the amount that you can charge for the hour, and the other is how many hours you can physically deliver in a year. That’s going to cap the income that you have. If you’re able to create products or create royalty streams or other revenue streams, then you can exceed what you’re just doing hours times rate.

It is, I think, an adjunct to the billable hours as we start to say how many hours, because I think lawyers are maxed out. You know, you just can’t bill more hours than what lawyers are doing now. I mean, you just can’t work more than you are.

Clients are probably going to say that lawyers are about maxed out on what you can charge per hour, so you do need to look at different business models with that type of constraint.

If you say, I’m already producing information that can be sold, then that offers this other way of producing revenue that may allow you to kind of increase the pie, or make the pie bigger, if you don’t have those constraints that you have with billable hours, so it is a way to think about billable hours as well as information products, but I think the products thing in and of itself is pretty interesting.

Tom Mighell: When you talk about products, I think that there may be some people out there who are having trouble getting their minds around what you mean by product. Maybe giving a couple of examples of what companies in other industries are doing or maybe what some of the law firms that you’re familiar with that are already taking advantage of this, can you give us some examples of the types of products that companies are creating that kind of meet this new business model?

Dennis Kennedy: Yeah, the first one that always comes to mind for me is Ernst and Young every year does a tax guide and you can buy the book on Amazon. I’ve bought it in a number of years whenever I had an interesting tax question I had to work through. It sort of looks at the new law, capitalizes on research that they’ve done, and then puts it out as a book in a popular way.

When I checked when I wrote the article, it was well up there on the list of best sellers on the tax topic. This is work that they’ve done, the type of research that they do every year, and rather than just limiting it to their clients and charging by the hour for that research that they do, they’re able to create a book and put it out there and sell it in a popular way.

That’s one example of where you take existing research or something that you do on a regular basis and you turn it into a book or something similar to a paid subscription, that sort of thing.

Another one that’s, and I want to talk about a little bit more later, but one of my former law partners Larry Katzenstein created a program called Tiger Tables which was a program that calculated actuarial factors you need to make certain gifts under the estate and gift tax laws.

He was able to sell that software as a stand-alone product to all sorts of people who weren’t his clients, including the IRS, and then use that because he became known for that program, to actually, that fed work back to him, but was able to obtain royalty income or revenue from that program.

You can see how that could have application in apps. I’ve seen companies that want firms to create document-assembly apps so they can do repeatable documents, say non-disclosure agreements, that sort of thing.

Also I see things where you can say, especially in a consumer-type practice or an estate planning practice where you say, “Hey, every time I talk to clients, I say the same things. Can I turn that into a video that I sell?” Or could I say, here’s something, you know, probate in Missouri, I create a video and sell that to people who might not become my clients.

There could be other things like that, subscriptions, those sorts of things, so that’s what I mean by information products.

Tom Mighell: I know that a lot of law firms have jumped on the band wagon, primarily big law firms but some others have done it as well and created apps, either apps for your phone or apps for your iPad or just web apps, things that you can visit.

I think that we saw them start mostly on law firm websites where you could go. If you were the HR director of a company, you could go and answer some questions and it would give you some basic advice based on employment law issues. Those tools for the most part were free.

You may, for some of those, you had to be a client of the company. Now we’re seeing lots of these apps that are coming out free to provide information not only to consumers but to other people. That sounds like a use of firm information, of their knowledge that they’re sharing, but they’re not really monetizing that. Is that part of this business model, or are you thinking primarily of ways to license content and get it out there and actually make money off of the content.

Dennis Kennedy: Yes, let’s take a step further. In the past, I’ve talked about the freemium model, and that’s exactly what you’re describing. I’ve come up with these things, it could be newsletters, it could be apps, all sorts of different things like a video, all that sort of stuff, and you say, I put it out for free, let people find it.

Like an example, I said here’s a video telling you how to probate in the state, in Missouri. I don’t charge anything for that, but people see that and then they hire me to do their services. That’s what you call model. By giving away something free, it results in revenue because I’m paid for services.

This takes it to that next step that says, rather than giving it away free, what I create is something that has value that people will understand, and I can sell it for some amount.

Again, look at that Ernst and Young thing, which I think is like a $29 book, but you potentially a big market for that. You’re just unlocking the intellectual property that you’ve already create, but you’re looking at it as a way to say, this actually does produce revenue.

You could look at the same type of thing, analyze the audience and in one case you might say, “This is something I put out for free with the idea it kind of markets my service.” Another where you say, “If I put this out there, it’s really not going to lead to much in the way of services, but it might create a revenue stream on its own.”

Tom Mighell: As part of the article you wrote, you’re kind of giving some advice on what firms or lawyers who might want to get started on this, what they need to do. You’ve got a, I would say, ambitious nine-step approach to get started. I don’t think we have time to cover all nine. We’re going to link to the article in the show notes so people can go and read all of those if they need to, but what are some of the most important steps that you think you want to at least cover in the podcast today?

Dennis Kennedy: I think that it goes back to this notion, I talk about it in the article, is that lawyers don’t ever like to look at what other people are doing, what the other professions are doing. If you come up with an idea for lawyers, they say, “Whoa, how many other firms are doing this?” or how many lawyers are doing this rather than just saying, “How successful has this idea been elsewhere?”

That’s one thing I say is to say, you got to look and say, “What are other people doing? What might make sense?” That’s why I tried to give a few examples in the article. I do think you want to say, what’s out there? Maybe this won’t work for me but maybe I do have some things out there.

Typically, you got to look through and say, with fresh eyes, say, what is it that I do, especially stuff that’s repeatable, that has some value that might have either an audience that’s beyond what my client base is, or is this the type of thing that I do that I can’t really charge for. I can only charge one client for but I can’t give the results to somebody else because you run into those types of issues of charging one client for work you’ve done for another.

I think you do that and then you start to say, what are the products that I can create? Take a look at the market and try some things. There’s that notion out there of fail fast, but try some things and see what works. Measure, try some other things, and don’t do things that spend a lot of time.

We can talk about what Larry Katzenstein did with Tiger Tables where he figured out something. We all sort of thought he was crazy, but he took three huge volumes that the IRS put out of these mathematical factors and rather than just doing a spreadsheet to do this for each client, he figured out that he could learn the programming and put together something that was a calculator.

Now you would do this as an app. It totally makes sense as an app, but he did it as a stand-alone program that he sold for a couple hundred dollars, and it replaced these three books. It made things really easy for people, so easy that the IRS started using it themselves rather than having people look through these three volumes of stuff.

You can kind of look at things like that where you go, “Hey, I’m doing something that’s really helpful to me, but it could be helpful to a lot of people.” Those are the types of things I think you want to look at and then you got to look at the pricing and how you sell it, that sort of thing.

Tom Mighell: Of the different steps to that you mentioned, the only one that I want to maybe push back on a little bit, at least in terms of the productization of services, I know that you and I have discussed the idea of taking a portfolio approach in many different contexts. We’ve talked about that in terms of collaboration tools and making sure that you don’t put all your eggs in one basket and only use one collaboration tool. Use tools for the things that make sense.

I guess that my push back on this is that this type of idea is something that’s really very new, and something that a lot of firms are going to feel uncomfortable about going all in. It would be, to me, the more logical or natural approach would be more of the testing-the-waters type thing.

It seems to go against your recommendation that you try to diversify your products, which sounds to me like you’re going to roll out a bunch of products at once. Maybe I misunderstand that, and if I do then tell me, but it sounds to me like the better approach is to start with a product and see what works and then maybe go to the next product after that. I think that when you’re trying to roll out a product or series of products, that trying to do too much at once, that could lead to failure as much as anything else. Did I read you wrong there?

Dennis Kennedy: Your comment’s a good one. I guess when I talk about portfolio approach and diversification, I’m trying to cover, especially in print, I’m trying to cover, in this case, a lot of ideas in a limited space. I sort of have two thoughts there.

One was I was trying to address the notion of as you get to firms of medium size and up, then you would want diversification from different groups or different parts of the firm. Make sure that you don’t say, “Oh, we’re just going to try,” – because lawyers, you know, law firms like to do this a lot – “Oh, we’re going to try this and just the real estate people are going to do something like that.” Try some different areas.

If you’re just one person doing it and you’re saying, “Well, I think this video thing,”- “Your idea of just recording myself do videos of the same, like the benefits of a living trust, if I did that, then I like the idea of videos and I can do that.” I would say, don’t just try one of those and throw it out there and say, “I’m just doing this living trust thing,” and it doesn’t get traction, you go, “Oh this was a crazy idea.”

If you say I put out a couple of different things, try a number of different videos, and then kind of do that, that would be the sort of diversification. I just hate the idea of saying I’m going to try one product, give it a month and then say, “It didn’t work, this is a crazy idea.”

I think that the potential benefit of doing some of these things could be really good, especially as lawyers see more and more resistance to raising rates and also, I think, physically most lawyers are at the limit on how many hours they can work.

Tom Mighell: I guess I see the difference is that I agree with you that you don’t give it a month. You maybe give it more than a month, but I still think that having that one product, I think an advantage to that in what I’ve seen in both companies and law firms is that you start with that one guinea pig that then can become the champion. You get other people to see what’s going on and they get excited about it, and then you can expand into other groups with other products.

I agree that one month and a short period of time, whether it’s a month or a week or two months or whatever that is is not realistic. I think you need to give it time to get traction in the market.

That would be, I think, my only disagreement, but there are other issues, I think that the cautious lawyer is probably thinking about listening to this podcast, and you address those in your article as well, but I think of them as, obviously, ethics issues for lawyers.

Who owns this? There’s an intellectual property aspect to that. What happens if I leave the firm and it was my product? What happens to that? Do you want to give any, I’ve kind of lumped them all together, but those are all kind of important issues that lawyers are going to want to think about. Any thoughts in general on where they need to head if they’re thinking about creating a product for their firm?

Dennis Kennedy: I think all of those things are important. I think the ethics piece, there is a line between giving information and giving legal advice, and if you’re close to that line you need to be aware of what you need to do. In some cases, I don’t know about other states, Missouri’s great because you can get informal ethics, we have an ethics counsel you can get informal advice from, so if your state has that sort of thing you can check into some of that stuff. Otherwise you want to get a good idea of what it is that you’re doing out there.

Obviously there’s a lot of antagonism in the legal profession and by the bar regulators to things like Legal Zoom and other things like that, so the fact that you’re creating products, you are in an area that’s already a sensitive area.

The ownership is an interesting thing. You need to think that through because it is tricky if you’re a partner in a firm and whether you’re doing this, whether you’re in the work made for hire category and who owns the actual copyright. It all comes down to partnership agreement, and then when you leave, believe me, this stuff gets tricky, especially if you have a successful product that you created yourself and you’re leaving.

I can tell you that probably these days most law firm partnership agreements do not cover this stuff. You want to sort it out going in, and that works from both sides. If you’re the creator, I think it’s best to get that worked out with your firm while the product has little bit of value and people think you’re crazy because then they’ll more likely let you take it with you or give you more of it when you leave. If you wait until the end and it’s really successful, then it’s going to be a [inaudible 00:21:25] year to determine that.

Tom Mighell: I think that all of that kind of goes to say that the concept of creating products in your firm out of the information, the knowledge that you have is not a simple process. It requires a lot of different thought and it’s not something you just go into on a whim. Dennis, to take us out of the segment, any last thoughts to leave people with as a wrap up?

Dennis Kennedy: I realize this is- I present this as a big idea, so it’s something to get you thinking and to get lawyers thinking. I think that is, as I said in the other professions, consulting, accounting, other things like that, people are already doing these things.

In a certain sense, you’re repurposing things that you’ve already done in new ways that are attractive to either consumers or other people interested in what you can provide.

I also think it’s an opportunity for something we didn’t really touch on but that’s out there, that there’s some really cool things you can do in terms of decision trees, other analytical tools that you could sell as sort of like screener products that would kind of steer people away from giving you all these routine, simple commodified legal questions to kind of help them navigate certain basic things and then to get them to call you for the more important questions.

That can be done as a freemium sort of thing where you do it as free or it could be something where you say, “Here’s a sort of simple tool about import/export, something like that, that I could actually sell to people. Don’t forget there are some other technologies out there that you could do.

I also say that probably the area apps could be an interesting one as well, although I don’t know how high you can price on apps.

Tom Mighell: Yeah, that’s tough. Well, lots of things to think about. The article’s a great one. We’ll make sure to put a link to it in the show notes, but thanks for sharing that information with us in this podcast.

Before we move on to our next segment, lets take a quick break for a message from our sponsor.

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Tom Mighell: Now let’s get back to the Kennedy-Mighell Report. I’m Tom Mighell.

Dennis Kennedy: I’m Dennis Kennedy. Tom and I are on the ABA’s law practice division’s publishing board. At our last meeting, we noticed we had a lot of great topic ideas for books without potential authors for them. We thought we’d talk about writing books on legal technology and law practice management based on our experience and reach out to our audience to see if you – yes, that’s you – might have a book that you’d like to write inside you.

Tom, do you want to start with a little background on this topic?

Tom Mighell: I think that the background you really started to give it, Dennis, when you started to talk about what we do in the publishing board. We’re really always looking for authors who can write books for lawyers to help them with the business of the practice of law.

We talk about technology on this podcast, primarily, but for our books, we’re looking for books on marketing and finance and general management practices as well. We’re always looking for folks who are willing to write books, but we tend, in our group, to come up with a lot of great ideas for the books.

The board is always coming up with some great topics, but sometimes we have difficulty finding authors. A lot of technology topics. We’ve got a lot of technology experts in the law practice division, ABA [inaudible 00:25:48] speakers, those types of things. We’ve got lots of expertise, but there are some topics for which we don’t have the right folks to write books.

One of the things that I think we wanted to talk about was to maybe make a pitch and say is there a book in you, whether it’s on one of those topics – technology, marketing, finance, practice management. If there’s something in that, maybe to see if-

One of the things we’re going to try to do more is do a call for authors, have people bring their ideas to us and see if those are books that we’d be interested in publishing.

Dennis, do you want to start out and maybe talk a little bit about your experience and what you’ve done as far as writing books are concerned?

Dennis Kennedy: I think that I did want to talk a bit about the writing technology books, because I think sometimes people struggle with that idea, to say, “Why would I write a book on something that’s a technology that’s changing?”

I think what we’re able to do with the book is to give people both a sort of a resource that’s a book that people are comfortable with, and also give the lawyer perspective, so you can actually write a book that is really tailored to lawyers and how you use things.

A lot of people really have a lot of knowledge on technologies that they can share. They may do speaking, they may write articles, but they haven’t-

They might have all kinds of notes and tricks that they do and things that they’ve done where they think they’re just the sort of normal user, but they’re actually not. The whole exercise to putting that together in a book can be really great, and then it turns into a book that you publish that turns into more speaking and all of that.

I think that people sometimes underestimate what it takes to do a book, and also the fact that, the books I’ve written I’ve done with a co-author. Writing a book yourself is difficult, but you can certainly do it with somebody else who you also think is knowledgeable. Especially through the law practice division, there’s a great outlet for doing that publishing.

Having a published book is a cool thing, so if it’s something that you think you might want to do, it’s definitely worth exploring. I did want to follow up on what you’re saying, Tom. In a way we’re just making a pitch to our listeners to say hey, if you would like to write a book, let us know.

I think the other thing is we do have topics that we don’t have authors for, so if you’re thinking, “I could write a book about something but I’m not really sure what you guys have in mind,” get in touch with us and we can give you an idea of what those topics might be.

Also, where I’m interested in hearing from listeners, what ideas might you have for us to help us solicit authors of books? Should we put topics up and sort of let people bid on them? Is there a better way to get a call for authors out to people rather than just put it on a website? I’m interested in hearing from the listeners on that.

Tom, your thoughts?

Tom Mighell: I want to hear from listeners also on potential topics as well. Are there topics that we haven’t published on that might be useful, that you think that there’s a place for, that maybe you’re not the right author for it, but something that you’d be interested in reading? We’d love to have ideas for more topics, and hopefully that leads us to more authors or the same way.

If you’re not comfortable writing on something but you know somebody who’s an expert on a topic, then either pass this podcast along to them or let us know who that is and whether we can get in touch with them, those types of things.

I think that Dennis is right. I think that there’s always a concern that technology changes so quickly.

One of the things that I’ve found is that, we talk about this on the podcast all the time, lawyers are notoriously late adopters of technology, and one of the things that we find about them is that they still tend to buy the paper books regardless of whether they’re going to be out of date in a year or not because they like to have that comfort of having that book in their hands that they can sit down and put on their desk and then they can pick up if they need a guide for something.

A lot of our technology books have served that purpose as sort of that desk reference that people need to be able to, as they’re working through using Microsoft Word or Outlook, being able to go and check and figure something out.

I think what really sets our books apart is we are taking into account how a lawyer would use these tools, so a lot of the books talk about ethics issues. A lot of the books talk about specific legal types of topics that you wouldn’t find if you go to the bookstore or you go to Amazon, you get Word for Dummies or Outlook for Dummies, you’re just not going to get the same kind of content because we’ve got people who are really thinking about how lawyers think and how lawyers want to use them.

I also was talking to Dennis before we did this podcast thinking I don’t know many folks who listen to this podcast have a technology book in them, and that’s why I wanted to talk about the others. We have lots of books about marketing and finance and management but we need more. We’ve got lots of demand from people who are trying to run their firms who need help on a lot of these different issues, and we sure would love to have your input on what you think would make a good book, whether you or someone else would make a good author.

Help us improve the program. We’re going to put in the show notes a link to the proposal form that you can use or you can send to anybody that you want. We hope that we hear from you. You can always email us or send us a tweet if you have a question or a comment, but don’t be shy and don’t be afraid to download that form if you want to take a look and maybe send in a proposal or have somebody you know send in one.

Dennis Kennedy: Another way for people to think about it, Tom, if they would just let us know that they’d like to see a book from a certain person on a certain topic, I think that could be really helpful to us, too.

Tom Mighell: Definitely.

Dennis Kennedy: Now it’s time for our Parting Shots, that one tip, website or observation you can use the second this podcast ends. Tom, take it away.

Tom Mighell: I have been looking for, I’m a great user of the if this, then that tool, but one thing that it doesn’t do very well is help me manage tasks that come up in the context of meetings. When I am doing, primarily I use Ever Note a lot for my informal meetings, and our publishing board met by phone this week and I used Ever Note to take notes and take minutes of those meetings.

I used Ever Note, but I don’t find that Ever Note’s a very good to-do manager. I know a lot of people use it for to-dos and tasks, but I need something a little bit more powerful than that.

I use a task manager that’s on the web and I’ve been looking for something that helps me with that, and I’ve found a website called Task Clone, T-A-S-K-C-L-O-N-E,  that connects Ever Note to your task manager in a way that’s really nice.

This week, while I was taking my notes, I would just create a checklist of all the things that were to-dos, and I assigned a specific tag to that note in Ever Note at the end of that meeting, and Task Clone connected to my Ever Note account. It would go and search for all the notes that had that tag on it and it would immediately take all of those and it imported them as tasks in my task manager tool.

It was a great way to deal with it. It was automatic. I don’t have to worry about it. Now all those tasks are sitting there and I can then assign them to people or assign them to myself and assign due dates to them. Really helpful way to manage tasks through Ever Note and your favorite task manager.

There’s a free version that lets you kind of do things within Ever Note. I opted for the, I think it’s twelve bucks a year, to allow me to connect it to my task manager. I really like it. Definitely worth a try. You can try it for free. Task Clone.

Dennis Kennedy: Mine is, I was on vacation a couple of weeks ago and I realized that Facebook decided that what I really wanted to have happen when I went to my news feed was all the videos that people had uploaded would just start playing automatically as I scrolled down the page. That’s absolutely not what I want, of course. It was happening on my phone, which presumably was using up my data limits, and it was also on just the web page on my computer.

On my computer, I went into the settings, pretty straightforward, found a thing for videos, turned the autoplay off, but on the mobile app, for some reason, it was really difficult to find.

If you go in there and kind of hack around into your settings, and for Facebook you’ll find something eventually in video and it’ll give you three choices where you can either leave this autoplay on, you can use it only if you’re connected to wi-fi, which is important on the data-usage side, or you can turn it off, which is what I ended up doing. Then you can just start a video manually, which, to me, seems like the default way I would like it anyway.

As usual, the great Ask Dave Taylor blog has a nice blog post that helps you turn off that autoplay. If you just go to the Ask Dave Taylor blog, askdavetaylor.com and just do a search on something like “disable Facebook video autoplay to save bandwidth” and you’ll find this great post where he walks you through the instructions on how to do that.

Tom Mighell: That wraps it up for this edition of the Kennedy-Mighell Report. Thanks for joining us on the podcast. Information on how to get in touch with us as well as links to all the topics we discussed today available on our show notes blog at tkmreport.com. If you like what you hear, please subscribe to our podcast in itunes or at the Legal Talk Network site. You can get to archives of all our previous episodes in both places as well. If you have a question you want answered or a topic for an upcoming podcast or maybe an idea or an author for an upcoming book that you’d like to write or have someone else write, please email us at [email protected] or send us a tweet. I’m @TomMighell and Dennis is @DennisKennedy. Until the next podcast, I am Tom Mighell.

Dennis Kennedy: I’m Dennis Kennedy, and you’ve been listening to the Kennedy-Mighell Report, a podcast on legal technology with an internet focus. Help us out by rating this podcast or writing an review on iTunes.

Thanks for listening to the Kennedy-Mighell Report. Check out Dennis and Tom’s book, “The Lawyer’s Guide to Collaboration Tools and Technologies, Smart Ways to Work Together,” from ABA Books or Amazon. Join us every other week for another edition of the Kennedy-Mighell Report, only on the Legal Talk Network.

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