What can Aus/NZ bookkeeping firms learn from the rise and rise of Legal Zoom – a company that stole market share from traditional law firms, not by stealth, simply by offering a more compelling ‘story” than the traditional law firm? LegalZoom operates online, making it accessible anytime, from anywhere. It invests heavily in online marketing which enables it to reach massive amounts of people. Most law firms operate only locally and are unsophisticated when it comes to online marketing. Does this ring true for bookkeeping firms? Many bookkeeping firms still have a ‘face’ (website, directory listings) that is local-focused.
What lessons can we learn from the Legal Zoom case study?
Legal Zoom started with a simple offering – essentially one that took legal services that could be automated, that is, could be operated online. Its legal services are powered by software, not humans. Most law firms have not implemented or developed the kind of software tools which would enable them to operate with such efficiency.
But the legal services market keeps growing – much like the accounting and bookkeeping services market keeps growing. Gradually Legal Zoom has been moving up on the complexity scale, partnering with law firms and adding “attorney services” to their offerings where there are gaps.
This has left the more traditional firms flat-footed: they are behind the times. They are not innovative enough. They are not equipped to grow their practices. In this regard there is a lack of tools and an inadequate response to moving towards being a technology-based business. LegalZoom is a technology company. Many bookkeeping firms are grounded in processes that are manual – for example, paper receipts and invoices.
Lack of Distribution
Consume behaviour is driving law firms to be more cost effective in order to be accessible to a wider audience of users. Witness the penetration of Xero and QBO into the white space of SMEs which is clear, yet largely unaddressed market, hungry for better solutions and lower costs.
Face-to-face legal services are being trumped by online distribution of legal services by operators such as Legal Zoom. Distribution of bookkeeping services do not require face-to-face or client located presence.
How to capitalise of the Legal Zoom lessons
For bookkeeping professionals who do not need to be convinced there is a need to adapt to the changing needs of the accounting services market:
Increase your investment in Online Marketing: Bookkeeping firms can broaden their reach by investing in good websites and online marketing tools to attract and retain more clients.
Invest in workflow improvement: Bookkeeping need to implement more systematic processes for workflow. Systems are a key plank in the build of a bookkeeping business
Use Add-on technology: Using good accounting software which offers productivity tools like client on-boarding, software to manage leads and marketing campaigns
Innovate the Business Model: Firms using alternative billing methods such as fixed price packages are already experiencing faster growth than the ‘average’ firm. The bookkeeping firm business model has and will continue to change, shifting away from hourly billing toward other, and more predictable and client-friendly approaches.
Today’s clients have a wealth of alternatives to choose from, and new entrant like the millenials expect solutions accessible at the click of a mouse or tap of a smartphone. The status quo is a dead end.