11 - The Value Shop Configuration of Legal Services

Summary

The most important business processes are often found in the law firm’s value configuration. A value configuration describes how value is created in a firm for its customers. A value configuration shows how the most important business processes function is to create value for customers. A value configuration represents the way in which a particular organization conducts business. The best-known value configuration is the value chain (Gottschalk and Khandelwal, 2003).

In the value chain, value is created through the efficient production of goods and services based on the input of a variety of resources. The firm is perceived as a series or chain of activities. Primary activities in the value chain include inbound logistics, production, outbound logistics, marketing, and service. Support activities include infrastructure, human resources, technology development, and procurement. Attention is focused on performing these activities in the chain in efficient and effective ways.

Value cannot only be created in value chains; it can also be created in two alternative value configurations: a value network and a value shop (Stabell and Fjeldstad, 1998). Value chains, networks, and shops are compared in Table 11.1. A value network is a company that creates value by connecting clients and customers that are, or want to be, dependent on each other. These companies distribute information, money, products, and services. While activities in both value chains and value shops are done sequentially, activities in value networks occur in parallel. The number and combination of customers and access points in the network are important value drivers in the value network. More customers and more connections create more value to customers. Examples of value networks include telecommunication companies, financial institutions such as banks and insurance companies, and stockbrokers. Value networks perform three activities:

• 1. The development of customer networks through marketing and recruitment of new customers to enable increased value for both existing customers and new customers.

• 2. The development of new services and improvement in existing services.

• 3. The development of infrastructure so that customer services can be provided more efficiently and effectively.

The current technology situation in a value network will mainly be described through the infrastructure in activity 3 in the above list, which will typically consist of information technology.