Social Networking for Professional Services Firms shows how Attorneys, Healthcare Providers and Investment Advisors Can Use Social Networks Safely
Having spent all of my career in professional services, I appreciate the conservatism and professionalism that characterizes regulated businesses. Professional services deal in complexity and trust, so they have internal and external constraints on their communications. Consequently, all are laggards in adopting social networking in their practices. However, as social networking adoption grows among their client bases, they will be at an increasing disadvantage by staying on the sidelines. Here I’ll offer a cursory treatment of a complex subject. After explaining how social networking is affecting professional services, I will show how firms can participate today while remaining within compliance.
No Threat from Competitors, but from Substitutes
To begin to understand the threat faced by professional services, reflect on your firm in 1996. “The Internet” was the domain of mere techies, hacks and students, and no firm was going to have a website. However, clients began to appreciate Web 1.0’s real-time information and transactions, expectations changed, and all firms were eventually forced to have presences. Some even used it to increase their profitability.
Web 2.0 and social networks represent a much larger threat because they allow people to locate, contact and engage others that have specific expertise. People increasingly organize discussions about highly specific subjects that are the domain of professional services. Consider these:
- You want to learn the intricacies of importing GMOs to Peru, but you no longer have to call your lawyer right away: locate people on the ground through Quora and LinkedIn (its excellent Answers forum was discontinued in 2013) and have several discussions to come up to speed within a day or two.
- You’ve been diagnosed with cancer, and your doctor has recommended amputation. Log onto a community like Daily Strength, Patientslikeme or CureTogether, which feature experiences of people with the same condition one, two, three years after, and learn some of the trade-offs before you agree to the operation.
- You are interested in serious investing in southeast Asian companies, so you start conversations with management of southeast Asian companies through LinkedIn.
Please do not assume that I mean to say that “the crowd” will replace professional services. Not exactly. To appreciate how social networks will affect you, realize that most professionals’ overall value is comprised of several layers:
- Evolved expertise and tacit knowledge (tempered by experience)
- Core services (prosecution in court, operations/drug treatments, investment strategy and trading)
- Information gathering, contextual advising
Social networks will have little impact on the first, and selective impact on the second. However, they will have significant impact on the third layer, which will color clients’ expectations of the firm and how it delivers on the other layers. Clients will decreasingly come to us for all three layers of our offerings. Smart firms will appreciate these distinctions and move to make themselves available to clients and prospects in social networks, where they increasingly visit during their due diligence phases.
For a longer treatment, I highly recommend Mark Chandler’s superb post (Cisco General Counsel) on the evolution of knowledge businesses.
Finally, within each competitor group, pioneers will move first and seize the advantage, putting themselves in the (digital) room, where you are absent. Therefore, delaying adoption to remain in the realm of the known may be comfortable, but risk increases each quarter because clients are adopting social networks and changing their expectations of their professional services providers.
As Mark writes, this trend need not detract from firm profitability, but it will affect how you structure services and how you charge in the long term. You can choose to let pioneers set the table for you or to move earlier and influence the outcome.
How to Mitigate the Risk of Participating in Social Networks
The key to success with social networks is to understand each social network (venue) and what kinds of communications within it could lead to trouble. These will fall into three classes: interactions that are safe, those that are okay within established guidelines and those that are off-limits.
Firm principals do not perceive the threat and opportunity, so there is little impetus to investigate. Moreover, leaders are not knowledgeable enough about venues to know how interactions could be safe or troublesome. Meanwhile, clients’ LinkedIn invitations go unanswered. Younger partners and associates are frustrated because they understand the venues better, and they are pressured to bring in business, but they are forbidden from participating.
Here is a general approach to investigating how to use social networks and Web 2.0 to improve your competitiveness.
Phase One: Explore
- Organize an initiative to explore the potential relevance of various social networking venues to the firm.
- Designate a well regarded partner to lead this initiative. S/he should have experience with technology and/or disruptive innovations. S/He will have little trouble organizing younger associates for help.
- Focus on clients and influencers. Which are using social networks, and how are they using them? Do not look for extensive adoption, but at trends. Clients in some practice areas will adopt faster than others. Adoption in many industries is accelerating. Don’t overlook competitors of clients.
- Target relevant subject matter. If your firm uses an SEO expert, ask him/her to forward your SEO keywords to help. Keywords lead to conversations. For example, most members of LinkedIn have no idea that LinkedIn Answers has forums in which members discuss Commodity Markets, Currency Markets, Futures Markets, Hedge Funds, Corporate Law, Tax Law, Antitrust Law, Health Care, Health Administration, …
- Use tools like Social Mention, Technorati, Google Blog Search and Twitter to locate relevant conversations. Note, they do not usually have access to social networks to which members log in.
- Don’t overlook blogs, Twitter, Yammer, YouTube and others. They can be very relevant to providing information to clients and interacting with prospects.
- Realize that many of these venues are nascent, but they are growing quickly. The conversations range from frivolous to very serious, so do not be distracted by the former.
Phase Two: Analyze
- Based on your findings from Phase One, designate several associates and partners to study and experiment with the functionality of various parts of relevant social network(s). In LinkedIn, examples are Answers, Groups, Status Visibility and Apps. Before initiating Phase Two, consult compliance to identify potential problem points.
- Have your team define workstreams and clickthroughs. For example, in LinkedIn Groups, one workstream would be sharing a news item and asking for and responding to other group members’ discussions.
- Once you have workstreams defined, you accomplish two things: 1) the platform/venue loses its mystery and 2) you can apply compliance within the context of the workstream, giving explicit guidance to professionals. This is the key to gaining the benefits. Remember, few compliance professionals understand social networks, either, so when in doubt, they will err on the side of mitigating risk rather than tapping opportunity.
- Depending on your business, many of your employees already have presences on social networks, but they lack guidance, and their presences are poor. Your firm is missing an opportunity to project its brand through employees’ profiles. Do not make the mistake of dictating what employees must put on their profiles, but do give them recommended guidelines.
- Develop a well-informed social business/social media policy, which aims to protect the firm while encouraging employees to participate and add value.
- When you define workstreams, you can organize compliance around the workstream and give relevant guidance. Likewise, compliance will understand how to make optimal approval processes.
- When your partners, associates and employees participate and contribute to others publicly, those gestures of help are observed by others who have similar issues and interests, forever. This represents tremendous leverage for the firm, not to mention goodwill. When people ask questions, they set the context in which you can offer general help (within constraints), in full view of others who are also interested.
- Compliance affects firms similarly, but push the envelope within the guidelines. Doing it effectively requires employee experience and education. Social networks represent 21st century dialtone, and they enable people to create and manage far larger networks than ever before. This is another challenge to professional services, to whom clients often turn for connections to other trusted people. Clients are less dependent than ever and becoming less so each quarter.
- Clients will increasingly expect you to be present in these venues. You will have to go anyway, so why not give your firm the added benefit of being a leader?
- For additional information about how my firm approaches this process, see the Social Network Roadmap Pilot.