high street / noun / the high street of a town is the main street where most of the shops and banks are / [mainly British][i]
What can recent events in that hallowed institution, the London high street, provide for law firms in Sydney, Melbourne and Brisbane, indeed – law firms no matter where they may be? The answer: plenty.
For a start, complacency is fatal. Next, any business plan, whether it be for growth or to defend the firm from the predations of disrupters should be anchored in an overarching strategy[ii]. An energetic yet uncoordinated response to a competitor’s attack is doomed to fail eventually (if it lasts beyond the short-term long).
For years, the London high street has been dominated by big stores such as Debenhams, House of Fraser, and more recently Topshop (a relative teenager when ranked against these dowagers of retail but very much in the same mould). What they have in common of course is that recently they have all gone. Towering above them all, with a history that goes back 157 years is John Lewis. It’s still there but is in the throes of its biggest programme of change and its most challenging time since its creation. For those interested in management, John Lewis presents us with a live case study of how a broad-based commercial organisation, with strong brand awareness, and generations of loyal customers can cope with the existential challenge of disruption[iii].
The root cause of the disruption for all these institutions has been on-line shopping. Oh there has been Covid of course, but at a commercial level, the pandemic has had the effect of turbo-charging the rise of on-line shopping and thus hastening the demise of retailers whose mode of doing business is patently last-century.
John Lewis has recognised that it must embrace the internet if it is to compete with disrupters, the grand-daddy of them all being of course Amazon. True it is that John Lewis has achieved a significant increase in revenue as a result of its own renewed focus on on-line selling[iv] and other initiatives, but it starts from a woefully vulnerable position if its only line of defence were to try and match it with the behemoth that is Amazon. John Lewis cannot ever hope to match the spread of Amazon’s penetration of the on-line market. Not only that, Amazon’s distribution network is so far more extensive – and efficient – that to try and compete with it only on its (virtual) turf would be to commit commercial suicide.
John Lewis does have strengths and it is to those strengths that it is playing when – in combination with the development of its on-line channels – it has devised its strategy. Moreover, it is those strengths that are key to its overall business strategy.
John Lewis was itself a disrupter. Early in its development, its founder bought the separate businesses of a Mr Waite and a Rose, combined them into Waitrose and created a grocery arm which is one of the most prominent businesses of its type in Britain. Over time, John Lewis also branched into areas seemingly light years removed from furniture and haberdashery. It became unique: a marketplace where the consumer could buy just about anything. Sound familiar? Plus ça change. . .
True, John Lewis is providing goods and services than can be separately bought elsewhere but, crucially, John Lewis is providing a customer with the means to use that person’s status as a John Lewis customer to access with ease and cost-effectively as many of those goods and services as the customer might need or like. John Lewis has recognised that its customer base will irretrievably change and may indeed reduce in terms of numbers but the result it is aiming for is an increase in the amount spent by those comprising its new base on the expanded range of goods and services that it will provide. In short, the attraction for the customer is that they are a John Lewis customer. They might get this or that item more cheaply elsewhere but they have to invest time in finding it and moreover when they buy something from John Lewis there is an advantage in buying something else that they also want.
So what value does a client place on being a client of your law firm?
The instinctive response to that question is to analyse the three keys to doing business: quality, service and price. The signal lesson from the London high street is that a mistake is made if one undertakes that analysis only through one’s own lens or if one fails to recognise that there are actors, presently off-stage so to speak, who may upend the way business has hitherto been conducted.
If, at the turn of this century, one had asked executives at any of the big British retail houses how securely they regarded their businesses they would likely have given a tick in appraising their own efforts at quality, service and price. Customers – doubtless with less enthusiasm – might have agreed, but the market changed. Customers adapted far more quickly than the retailers and allegiances switched overnight.
So in assessing the value that clients place on your law firm, the natural and obvious starting point is to address the fundamentals of quality, service and price. Understandably, the analysis must start from within. The process must also involve talking to clients and learning what they really think about the firm’s delivery of the fundamentals. But the firm cannot leave it at that. The firm must look to what the market is offering and consider what might in the future be offered. The firm must also look to what is happening in other industries. AI did not start in the legal sector but it is part of the sector now. In 2000, big British retail houses would have known Amazon as a US based online bookseller.
If as a result of analysis, a critical weakness has been identified, whether as a result of an inherent problem within the firm or because a competitor offers something better or both, the truly difficult task commences: how to address the weakness. The real-time experiment we are witnessing with John Lewis is how, by capitalising on its strengths it plans to minimise the competitive advantage of online agencies as it affects its (reconstituted) customer base, and provide consumers with identifiable value in remaining or becoming John Lewis customers. The initiatives with which it is experimenting build upon its existing strengths. Those initiatives, while diverse, are consistent with an underlying strategy: providing to customers of goods and services sold by John Lewis, identifiable value in being John Lewis customers[v].
So the lessons from the London high street are to avoid complacency (despite such success as is being enjoyed at the moment) and plan for growth or defence having regard to an overarching strategy. To avoid doing both is fatal.
PTM assists law firms in undertaking reviews, designing strategy and in conducting qualitative client surveys.
[ii] For the importance of integration of initiatives with underlying strategy see in particular the article by ‘Why do so many strategies fail’ by David J. Collis in the Harvard Business Review July-August 2021.
[iii] See generally, the article by Henry Mance in the Financial Times, 21 October 2021, ‘Inside the John Lewis nightmare’.
[iv] ‘[T]he future of John Lewis is increasingly digital.’ The Telegraph, Christopher Williams 21 May 2021. In his Financial Times article, Mance refers to John Lewis’s online sales went from 40% of total sales to 75% through the pandemic and that after the introduction of its new business plan John Lewis returned to profit in the six months to July 2021.
[v] Examples collected in an article by Sahar Nazir writing in the Retail Gazette (‘Top 3 challenges Sharon White faces as John Lewis chair’) include, introducing a customer experience-centric store and allowing customers to collect on-line John Lewis orders from selected Waitrose stores and offering DNA tests in some London Waitrose stores to enable customers which foods are genetically suitable to them. In his Financial Times article Mance points to diverse examples like the construction of large-scale residential buildings on the sites of under-performing stores; the provision of financial services; partnering with Deliveroo to guarantee rapid delivery of goods’ purchases; a loyalty programme giving benefits like invitations to early tech launches, Black Friday discounts, and holidays on estates owned by John Lewis; one-to-one clothing appointments; and tying staff bonuses to overall profit and debt-ratio targets.