Social Media for Professional Service Firms – a strategic view

There has been a mass of publicity on social media and Web 2.0 in recent times and now much of that news is directed at professional service firms (PSF). A number of varying view points are put forward whereby social media sites such as Twitter, Facebook, LinkedIn, Martindale Hubbell, Legal On Ramp, Wikis, etc are either touted as indispensable communication tools or wasted efforts for client development. The articles however tend to miss the strategy of social media.

There are numerous detractors of sites such as Twitter for law firms and other PSFs but the main reason they claim the worthlessness of the media revolves around the limited number of professionals, clients, in house counsel etc that use it, and the inability of the medium to generate clients. Those who are proponents of such media like to highlight the limited numbers of instances whereby users have actually generated fees from tweeting or being on LinkedIn. Again, whilst this is great, the view is somewhat narrow. Whether twitter is around in 2 years or not is not really the issue, the issue is whether social media tools can influence a firm's stakeholders. In my opinion, the answer for PSF is absolutely yes. Firstly, who are stakeholders in a PSF:

• Partners and firm owners
• Support staff
• Investors and shareholders (something law firms in the UK will think about by 2011 and already well established in Aus)
• Associates
• Clients
• Suppliers
• Local community
• Community at large
• Pressure groups
• Alliance partners
• Intermediaries
• Regulators

These stakeholders all have a say and influence to varying degrees the actions that PSF can take and the degree of success they will have. One of the major benefits of social media is to communicate on various platforms on various topics with your stakeholders through mechanisms which reach the people you wish to talk with. So what if many of your clients do not use social media tools, the information that you provide to other stakeholders will reach them one way or another and it is much better to be aware of and in control of the communications about your firm. The fact that traditional communication tools are losing influence should be a sign to most firms that other platforms are becoming more appropriate. Take for example the recent research in the US which showed that law graduates from elite schools had lower levels of satisfaction than associates who graduated from lower ranked schools. The report suggested that elite school graduates were less happy with their jobs than their counterparts from lower ranked schools because they had more career options and were not necessarily willing to slog it out for years in the hope of partnership, whilst their counterparts felt this was the only thing they could do. If this is accurate, top ranking law firms who focus solely on hiring grads from elite schools face a situation whereby declining satisfaction levels will eventually affect firm performance. How could a firm use social media to counteract and understand this trend? Social media such as Facebook (for example, used as part of the firm's intranet) can provide real time communication on the facets of the firm that effect work satisfaction. Rather than wait for the yearly appraisal or firm survey which is already two steps behind, monitoring what your employees think and feel by allowing them to engage in frank discussion through social media can be an effective tool in dealing with issues as they arise. Now this is a truly strategic use because it ensures you keep your best people and they have the opportunity to vent their frustrations. This will have a significant impact on the value the firm delivers to clients, probably much more than the new clients you may generate through social media in the near term.

Let's take another example. As the business of PSF globalize and firms open offices in far flung countries or create alliances, the ability to manage knowledge and the firms value delivering processes becomes problematic. Knowing what resources are available in different offices and whether knowledge located in one persons head is applicable to a project 1000 miles away can be a real source of competitive advantage for PSF. However, many PSF KM systems are not well suited to this type of knowledge transfer, or if they are, one must wait for the individual professional to contribute that knowledge to the system. Of course, in many cases, professionals often collaborate via email which creates problems of editing content as well as following multiple inputs and timelines. Clifford Chance has begun using wikis to share information across the firm on a number of initiatives. For example, they use wikis to run sector focused groups of lawyers to help tacit knowledge flow across the firm. This has replaced the outlook bulletin board so people can ask questions about client work, projects, problems etc and continually update/edit the document without the problem of lost emails and disorganized folders. This is a great way to use Web 2.0 tools to add value to the work the firm does for its clients. Again, this is a strategic view that recognizes value creation for the client is what it's all about. Another example is the platform developed by Deloitte (called D street) which is based on the Facebook concept and allows people in the firm to connect about their work and social lives.

Saying social media is useless for client development is like saying exercise and diet are useless for losing weight. It's all a matter of perspective and how long you give it. Firm profitability is not wholly dependent upon new client development, performance is affected by numerous factors, including the ability to retain top quality people and valuable clients. In fact, Adam Neely and colleagues (authors of the Performance Prism) show there are over 20 market sentiment factors that affect organizational performance and only one third of those sentiments are controllable by the firm. The rest comes from information and communication from a multitude of sources. PSF should start to take a social media policy seriously and think about communicating frequently and with substance targeted at all their key stakeholders, and not just think about whether existing clients use such media or whether new clients can be generated from these new communication and collaboration platforms. The strategic view should always come first.

Comments

[NY CPA Firms]

Great post! We have recently started relying on social media a lot more heavily...we have even hired a social media strategist. So far, I see a big change. I like your point on receiving real-time comments and opinions rather than wait for a yearly appraisal or survey. Besides, people may not remember their exact experiences a couple months later while filling out a survey. I'd like to know what people think as it's happening that way if they have a problem, we can rectify that situation. Also, I feel as though we're reaching out to a whole new audience that we weren't reaching before...hopefully we see a big change in profits this year. Thanks for the informative post, I like the way you think.