Issue 54 THE BUSINESS OF LAW ISSN 2050-5744

CUSTOMER IS KING

P6Jo Causon P9Theo P56 David Clarke Can Be a Demystifying Transformation: Key Differentiator Paphitis The Experience of Being Legal Enter the Dragon

Supported by INTERVIEWS

The Experience Economy B. Joseph Pine II is an internationally acclaimed author, speaker, and management advisor to Fortune 500 companies and entrepreneurial start-ups alike. He is Co-Founder of Strategic Horizons LLP and in 2020 re-released ‘The Experience Economy: Competing for Customer Time, Attention, and ’, featuring an all-new Preview to their best-selling 1999 book ‘The Experience Economy: Work Is Theatre & Every Business a Stage.’ Modern Law sat down with Joe to discover more about his work and how it can help transform the experiences that law firms offer.

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Translated into thirteen focus now just on what they do, but This is especially important for people who languages, ‘Experience Economy’ how they do it. That can turn mundane sell to other businesses (including in-house has become a must-read for interactions into engaging encounters. legal activity), for no business buys your leaders of enterprises large and offering because they want your offering; small, global and local and sits in Now with a brand-new preface, it is but a means to an end. If you sell the the top 100 best business books yourself and Gilmore make an even end, rather than the means, then you will of all time. Can you give us a short stronger case for experiences as create greater economic . synopsis of your career Joe? the critical link between a company Of course! I’m a nerd from way back, and its customers. In an increasingly And perhaps – if you forgive – no sector and started at IBM in technical and distractible and time-starved world, is less desired than legal (unless it be then managerial & strategy positions. why are money, attention and time accounting). All lawyers need to view When IBM sent me to MIT for a year now so interconnected? themselves as in the transformation to get my Masters degree, I took the These are the of the business, understand the aspirational jobs opportunity to turn my thesis into my Experience Economy! Time is limited; we of individual clients – aspirants would be first book, Mass Customisation. After only have twenty-four hours a day, seven a better term here – and guide them in that, I left IBM to found Strategic days a week in which to experience all achieving those aspirations. Horizons, a small consulting company that life has to offer – and we have to fit now with three people, and quickly sleep in there some time. But if current Please discuss what you mean by discovered the Experience Economy. or potential clients are spending time the term ‘customer sacrifice’ and Ever since I have been writing, with some other company, they are not how can one look to eliminate it? speaking, teaching, and advising on spending it with you. Likewise, in today’s Let me contrast it with something we how companies can create greater media-fragmented world attention is all know – customer satisfaction, which economic value through their offerings. increasingly scarce – and if some other measures how well a company meets (or company captures clients’ attention, not) our expectations. But expectations Having popularised the concept, they’re not giving it to you. And money often have nothing to do with what we what is the ‘Experience Economy’ is consumable; if clients spend their really and truly want and need. So, we and can it be applied to the legal money elsewhere, they cannot spend need to measure customer sacrifice – the sector both for service providers that money with you. difference between what some individual and law firms? wants exactly and what they have to The Experience Economy is the So, the only way to capture people’s settle for today. latest stage in a progression of how time, attention, and money is with an businesses create economic value. It experience so engaging that they spend Once we discover dimensions along began with the Agrarian Economy, their time with you, give you their with people sacrifice by putting up with based on , which was attention, and buy your offerings. standard offerings, then we can design supplanted by the Industrial Economy, offerings that we can mass customise based on , which in turn gave What do you mean in your work to each individual customer, primarily way to the , and by ‘transformative experiences’ through modularity, like LEGO building today experiences have become the and why do they hold the ultimate bricks or, even more robustly, with the value to your business? predominant economic offering. zeroes and ones of digital technology. Experiences are memorable events that Ah, this is the concept crucial for the engage each individual in an inherently legal sector to understand! Beyond How can savvy law firms excel by personal way, creating a memory as even experiences lies one more distinct offering compelling experiences the hallmark of the experience. They economic offering: transformations – the for their customers, resulting are distinct economic offerings - as fifth and final level of economic value not only in increased customer distinct from services as services are where customers seek change; they allegiance but also in a more from goods. want companies to help them achieve profitable bottom line? their aspirations. It might be to go from I suggest starting with the If you stage experiences, then flabby to fit with fitness centres, from transformation level, actually, and your work IS theatre – and no one sick to well with hospitals, from smoker then figure out the set of experiences understands that better than trial to non-smoker with cessation programs, required to guide clients in achieving lawyers! Also, like most industries from mediocre golfer to single-digit their aspirations. The first such today the legal sector is facing handicapper through coaching -- among experience is diagnosis – determining commoditisation, as low-cost firms a host of examples that could be cited, the client’s aspirations and where they and especially technology create for we all have aspirations we desire to are today relative to them. Then you tremendous pressure. To create come to fruition that are as individual as design the set of experiences that take differentiation, then, lawyers need to we are. them to that higher level – which in turn are built atop the legal service activities you do for them. The last stage is follow-through. Not “follow up” – just “To create differentiation, then, lawyers need to checking in – but ensuring that the transformations take hold over time focus now just on what they do, but how they do it” (and, yes, that may just mean a retainer relationship of some sort….).

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As for designing the experiences are organised around an underlying In your opinion, should law firms themselves, in our 2020 re-release of principle, called the theme; personal be looking to appoint a Chief The Experience Economy: Competing for – that reach inside of people and Experience Officer (CXO)? Customer Time, Attention, and Money engage them, ideally using the mass Absolutely! A Chief Experience Officer is we introduced five core elements of customisation principles I mentioned a great way of focusing your company on experience staging, the last of which earlier; and dramatic – that not only the experiences it needs to design and is transformative. So in addition to employ acting as a model but have a create for its customers. The only one I that, you need to create and stage dramatic structure to them that rises to a know of in the greater legal sector is David experiences that are robust – that hit climax and comes back down again. Clarke, who first attained the position the sweet spot between entertainment, at consultancy PwC but is now CXO of educational, escapist, and esthetic If you do all that, you cannot help UnitedLex, which provides an enterprise experiences {note: not “aesthetic”; we but design engaging, remarkable, and legal platform for legal functions. call it our 4E model!]; cohesive – that memorable experiences for your clients. I’ve written that CXOs should focus on four key roles facing both internally and externally: catalyst, orchestrator, designer, and champion. And one more: “All lawyers need to view themselves guide. For me, CXOs need to lead the as in the transformation business” internal transformation from delivering services to staging experiences and guiding transformations.

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“If you stage experiences, then your work IS theatre – and no one understands that better than trial lawyers!”

Let’s say hypothetically you make One doesn’t have to charge solely for all these changes you suggest to experiences and transformations; a your law firm. How do you then portion, perhaps the majority, of revenue determine the ROI of experience could be via service activities, with improvements? specific experiences charging for time Measuring experiences and and with a significant slice via outcomes. transformations is still more an art form than a science, but the effects of Before we finish, it’s important it in client acquisition and retention to underline that when you speak as well as greater revenue and profits of experiences, you don’t mean should be easy to see – if, that is, one ‘customer experience’ do you? follows the prescriptions we’ve been Even though the CX movement talking about. came about because of the shift into today’s Experience Economy, so-called And one clear way to see the ROI is to “customer experience” is not the same charge explicitly for experiences and thing as what I am talking about. CX transformations. Services are about involves making our interactions with time well saved – doing the functional customers nice, easy, and convenient activities better than I could do, – but these are service characteristics, clients the time it would take them not elements of experiences. Nice is (including going to school and passing nice, but rarely does it rise to the level the bar!), time they could better of memorability. Easy often means we spend elsewhere. So one charges for routinise things to make it easy for our those activities via hours spent on employees to service customers, but such activities. that gets in the way of making the encounter memorable. And convenience Experiences offer time well spent is the antithesis of experience staging, – clients value the time they spend providing only time well saved, not time with you, whether because they learn well spent. Experiences, which again more (often about themselves and are a distinct economic offering, cannot their business), gain confidence in be frictionless; they require friction to the potential outcomes, find value in create that dramatic structure necessary improving their own processes, and so for engagement. forth. So experience stagers charge for time customers spend with them via admission fees, membership fees, or “Experiences offer other ways. Note this is not charging for time and materials – that’s the lawyers’ time well spent – time and materials, not customer time! clients value the time they spend with you” And transformations generate time well invested, in that they gain outcomes that provide compound and yield dividends now and into the future. Transformation companies should therefore charge for the demonstrated outcomes that customers achieve! That makes the company’s (or legal function’s) income dependent on the client’s outcome. I’ve long said that any company that helps its customers become – to use Ben Franklin’s famous Joe Pine phrase – healthy, wealthy, and wise will is an Author and Cofounder at Strategic eventually move to outcomes-based Horizons LLP compensation.

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