Let’s say that I now need to purchase professional services instead of shirts and shoes? By way of example, suppose that I am a software engineer looking for a lawyer to help me with my new tech start-up. Given that start-ups are inevitably resource constrained, you can count on me to have a clear focus on the price element of the value equation set out in my earlier post. But what about the trust element?
Unlike the retail new middle example which we explored yesterday, my sourcing of legal services will be a complex purchasing decisions characterized by a high degree of information asymmetry. In fact, this is inevitably true for all current purchases of professional services (apart from corner cases where the buyer is a professional in the sourced service area) given the inherent information and knowledge gap between the buyer and the professional.
So how will I decide on legal services for my start-up? I might opt to simply ignore the legal information asymmetry and do it by myself while hoping for the best. Or I may find my lawyer based on the reputation of the law firm / lawyer, a referral from a friend or colleague, or a random decision. While the first two of these 3 R’s may prove to be a decent “trust” proxy, the current normative model for professional service purchasing decisions is largely (and in the case of the last R, entirely) a “leap of faith”.
Hmmm, sounds more Mayday than Bay Day….