Yelp is a mobile app that has become iconic for a class of technologies that improves market efficiency by enabling consumers to provide real-time feedback about goods and services. Yelp works on a star rating system (one star being bad; five stars being great) and allows users to upload pictures and make comments about their experiences at various establishments. The theory behind Yelp is that consumers, as a collective, are able to provide a more complete information profile of any particular thing than can, say, professional critics. And more information will inevitably result in a more accurate correlation between price and quality.
“Yelpification,” then, is the transformation of an inefficient market to a more efficient market via one or more technologies that enable the aggregation and dissemination of information about goods and services. In a Yelp-driven market, it’s not that a body shop/dry cleaner/yard service can’t survive doing mediocre work, but, rather, that it can’t charge more for mediocrity than it’s worth.
Just as the Internet has enabled Yelp to improve efficiency in consumer markets, other companies have harnessed the web to drive efficiency in some surprising places. Take, for example, AdvanceLaw, a company that aggregates information about law firms and sells it to large corporate consumers of legal services on a subscription basis.
In the past, there was no effective way for corporations to determine which firm had the best credentials for handling a particular legal transaction. Being hamstrung by a lack of information, corporations would tend to use law-firm size as a proxy for quality. This phenomenon drove the growth of AmLaw firms for decades.
AdvanceLaw is now Yelpifying the legal services industry by connecting corporate customers to whichever firm actually has the best resume for a particular transaction. As Firoz Datu, CEO of AdvanceLaw pointed out at a recent conference at Harvard Law School on disruptive innovation, in many cases, boutique firms are more qualified than AmLaw firms. By arming corporate consumers with more information, AdvanceLaw is routing customers away from AmLaw firms to smaller, more qualified firms that actually charge less.
Improving Efficiency Via Low-Code Development Platforms
For law firms to adapt to market Yelpification, they, themselves, need to become more efficient, that is, align their own prices with the quality of the services they provide. For most firms in many practice areas, improving efficiency will require the abandonment of hourly billing, a model that incents inefficiency. With hourly billing giving way to fixed-fee pricing, firms will need to automate processes by transforming them into low-code/no-code workflows that codify best practices, reduce human error, and speed up process outcomes.
Put another way, while AdvanceLaw is Yelpifying the legal services industry, platforms such as AgilePoint NX are helping savvy firms keep pace with improving market efficiency.