August 2013 Archives

Trying to build business connections has always been hard.

LinkedIn had made it easier.  I used to routinely answer all types of questions in many different LinkedIn groups about call centers.  I would always end my answer with an explicit direction to our website, if they needed to find more information.

Many people, but not all, went to our webiste and eventually became customers.

This seemed like a perfect sales pitch: I give you good information for free, and some people reciprocate by turning into customers.

Some group owners didn't like my approach and some did.  Fair enough.

But, LinkedIn then made it very hard with the introduction of Site Wide Area Moderation, or SWAM.

The group owners who didn't like my approach could SWAM me and put me on moderation in the groups that did like me.

I, and many others, could not understand this.

But then I read Michael Webster's concise point, on a LinkedIn group thread we both belong to:

"SWAM is effective because it gives owners unjustified reach - jurisdiction over non-members & other groups. That is the way it is designed. 

To amplify a single signal (try saying that fast 5 times in a row) of spam into the largest signal possible. It cuts down on needing and employing thoughtful moderators. 

If you are selling sponsored groups, it means that you don't have to spend a lot of money moderating them because SWAM is working for you. 

That is why SWAM is here to stay - as long as LI is making money off of sponsored groups."

What an epiphany!

That's the most cynical - yet as I now can see - most accurate & succinct definition of LinkedIn's anti SPAM Site Wide Auto Moderation (SWAM) policy that I've ever read.

I'd been campaigning against SWAM because I claimed that it was deeply flawed & fundamentally unjust.

Webster opened my eyes to see that SWAM is doing exactly what it was designed to do - and that in its own heavy handed & totalitarian way is actually a very "elegant" solution.

I'd been pointing out what a poor job LinkedIn has done educating group owners/managers/moderators as to what SWAM was to begin with.

Well - Webster is right. Why bother educating them when SWAM cuts down on the need to employ thoughtful moderators at all?

I'd been pointing out that SWAM gave a single owner/manager/moderator the power to suppress & muzzle a group member across the entire LinkedIn platform - without the need to provide even a shred of evidence.

And again Webster's explanation is correct. LinkedIn designed SWAM to empower a single owner/manager/moderator with unjustified reach & jurisdiction over non members & other groups - precisely because they wanted SWAM to amplify a single signal of suspected SPAM and to turn that suspicion into the largest signal possible - because by doing so SWAM cuts down on the time & money required to moderate groups - or the need to employ thoughtful moderators at all (particularly for Open Groups).

Yossarian was moved very deeply by the absolute simplicity of Catch-22 and let out a respectful whistle.

"That's some catch, that Catch-22," he observed. "It's the best there is," Doc Daneeka agreed. ― Joseph Heller, Catch-22

Legal Zoom - The Challenge to Franchise Attorneys

Richard Susskind has been writing for years about how technology will change the craft of lawyering from the production of specialized and unique legal consultation to scaled production.  

Some dismiss scaled production of legal products as mere "document mills".

Recently, some Franchise Attorneys, members of the American Bar Association's Forum on Franchising, made a similar complaint about Legal Zoom.

Legal Zoom charges its members $799 for a written review of the Franchise Disclosure Document, FDD.  Many attorneys in the Forum felt that such a low price was not possible, and was a signal of poor quality.

I believe that they could be wrong & they don't understand how legal skills can scale.  

This article is a short demonstration of how modern bargaining theory can help us see how we could scale legal products to benefit the consumer.

How Does Legal Zoom Work?

Can Legal Zoom offer a quality legal product at this low price?

Here is a sketch of how it could be done.  I am going to refer to the "Legal Platform" to make it clear that this article is not based on any inside knowledge of Legal Zoom's actual business model.  It is based on basic bargaining economics found in the literature on multi-sided platforms -which is just a long word for devices which match buyers and sellers by adding other elements or parts.  Legal Zoom may or may not fit what I am going to describe as the "Legal Platform".

What do you get as member of Legal Zoom?  What do you get for your $799?

Here is the description from the Legal Zoom website.

So, you get two 1/2 hour phone consultations and a "customized" report of the FDD, if you are a Business Advantage member.  This level of membership will cost you a further $24.00/month.

Now, it is difficult to see how a lawyer who is properly retained, and therefore under threat of sanction for professional negligence or misconduct, could afford to spend 10 or more hours on reviewing an FDD, charge only $799 & make any money in the long run.

(Of course, if the lawyer is not retained and is simply giving out legal information while explicitly disclaiming any reliance upon it that would be a different story.)

But, the trick to solve this economic problem to add attorneys, or types of attorneys.  One whose retainer is with Legal Zoom and the other whose retainer is with the business advantage member.  

Let's how this might work.  First, let's look at the bargaining problem.

How the Legal Platform Works - Matching Those Seeking Legal Advice with Those Who Will Provide it at the Right Cost

Here is a simple diagram of our problem.  

The buyer of legal information only wishes to pay $800, while seller will not accept less than $5,000.  

Let's assume that the seller's product is in fact worth $5,000 -an experienced attorney's time to examine the FDD and Franchise agreement is between 10 -15 hours at an hourly rate of $500.00

If you are very qualified & expensive attorney, it is natural to wonder if you could "replicate" your work by selling it over and over again to many new franchisee prospects.

For example, if there were 7 prospective franchisees each wanting a review of the same franchisor system, then collectively they could pay $5,600 for a review.

But, there are several problems here:

1.  Finding and coordinating all these prospects is a complex task - for which laywers have no special skills, experience or advantage.

2. The retainer problem is still present, and the liability for negligent advice has just been multiplied by a factor of 7.

3. It is not clear how you would deliver this legal product, and make it relevant to each of your 7 clients and still make a buck.

Now, here is where the multi-sided platform idea helps.  Instead of coordinating many prospects with one lawyer, we coordinate many prospects, with two types of lawyers, a non-specialist & the expert.

Again, let's assume that we have a collective surplus of $5,600 from the buyers, and 7 potential buyers.

Here is how the transactions could work.

1. The Legal Platform buys the FDD review from a very qualified & experienced lawyer for $5,000.  This is a good deal for the specialist.

2. Attorney3 is non-specialist, and so are the other Attorney members. 

These are the Attorneys who provide the two 1/2 hour calls, take the information, and provide some customization to the very detailed FDD they purchase from the platform, let's say for $500 per FDD.  They agree to limit their billing to $200/hr for the first hour and provide a 1/2 free hour.  From their perspective, each transaction is worth $200, or 1 billable hour because they get $800 from the platform & have to spend 1 hour on the phone, billable at $100, and have to buy a FDD review for $500.  So, as long as the customization doesn't take more than 1 hour, this is good deal for a non-specialist.

3. The Legal Platform also have members at $24/month, and this legal product can be marketed to them.  The Legal Platform also has attorneys as members, who agree to certain flat fees in return for having their phones ring.

But, if the Legal Platform can only match up 7 prospects with 7 non-specialists, it loses money.  Only after matching 10, will the Legal Platform make money.  It takes on this risk and finds not 10, but 25 prospective franchisees.

And then, everyone in the Legal Platform is happy.  

The members, the attorneys, and the Legal Platform have all conducted valuable trades - trades that would not be possible if the Legal Platform did not exist.

If you thought this was useful or interesting, then you should sign up for my Newsletter on Bargaining. Just click here and Mail Chimp will take over.  Thanks.  

Oh, and we never give out your email.

Many franchises have built their websites by creating local pages, which are part of the main franchise website, for each franchise location.

For example: www.franchisbrand.com/locationname.html.

In some cases these local pages reflect content that is unique to that location: specific store hours, location-specific specials, meet the staff of that location, etc.

In many cases, however, much of the content on each of those local pages is the same as the content on other local pages. Perhaps it is a welcome message, an introduction to products or services or some other general greeting for everyone who lands on that location's page.

With recent Google changes, this has become a very problematic issue.

Duplicate content (content that is written in exactly the same way) can have a very negative impact on search engine rankings. This means that if a franchise website is already at the top of local search engine rankings and it continues to have duplicate content on the local pages, rankings will likely drop.

If a franchise is not ranking at the top but is trying hard to get there, it will be a much more difficult process if there is duplicate content.

Considering other content alternatives might be the best option for franchises. Ideally, each location page would be written with unique content. Even if the subject matter were the same, the wording would need to be different.

Taking advantage of this to really craft location pages in a unique way could actually be a great benefit.

Franchises could consider using this opportunity really to highlight what sets each location apart from its competitors in that area.

Consider these thoughts: What makes the local team special? What makes the structure or setup unique and different? What could you show visually with photos or through action videos that would help capture the unique aspects of each location?

Having the franchisees provide input for their own content would help differentiate it as well.

Every franchise location is slightly different from all the others. Highlighting those truly unique aspects is a great place to start differentiating content. Then a simple rewording should do the trick for the rest.

Happy writing.