What Law Firms can Learn from Airlines

Rob_britton After I listened to Dr. Rob Britton, Adviser to the Chairman of American Airlines, I realized that the legal profession is a lot like the airlines:

  • They are undifferentiated industries.  Both must work to get out of being a commodity to corporate customers. (Sorry, but many general counsel feel that most law firms are interchangeable.)
  • Both are regulated industries.  Law firms are a closed guild that regulates itself, but there are still those ethics rules to obey.
  • Costs a big driver in profitability.  For both industries, personnel is the #1 cost.
  • Price is a key driver.  Whenever I ask partners what objections they run into on sales calls, the first thing they they say is, "the clients think we are too expensive."
  • What the customer is buying is generic. An airline seat is an airline seat.  To corporations looking for a technical expert, a lawyer is a lawyer.  People refer to "the airlines" as a monolithic entity; people similarly refer to "the legal profession."

Here's what American Airlines did to differentiate itself, and how law firms can apply the techniques:

  • Packaging and cache make all the difference.  For example, lipstick is a commodity, 80% of which is made in a single factory.  It goes into a simple tube, is labeled Maybelline and is sold at Wal-mart. The identical lipstick also goes into a fancy package, is labeled Loreal Paris and is sold at Nordstrom.  Packaging for a law firm is in their Web site, advertising, offices and direct mail pieces. Good packaging creates a cache.
  • Clients buy because of emotional reasons.  For American Airlines the tagline is "we know why you fly," illustrated by a father hugging his son.  For law firms the tagline would be "We are the safe choice," "We're the firm for bet-the-company cases," or "Call us when you can't afford to lose."  Safety is why corporations hire law firms.
  • Start a frequent-flyer program.  It's the most effective sales technique American Airlines has.  Special customers also get to use the fancy Admirals Clubs in airports.  Law firms can also create loyalty programs, by building client teams around "crown jewel" clients and making certain that the lawyers are business counselors, not just legal advisers.  Law firms can also create a "first class section," by spending lots of time off-the-clock with the clients.
Trackbacks (0) Links to blogs that reference this article Trackback URL
Comments (1) Read through and enter the discussion with the form at the end
Oliver Khaw - March 7, 2007 11:12 PM

Just wanted to leave a note to say that this is an excellent write up. Nothing hits a point home like a good analogy. Will be sharing this one with my other partners.

Post A Comment / Question Use this form to add a comment to this entry.

Remember personal info?