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The Marketplace

Updated: Feb 16, 2020

The legal services sector is characterized by information asymmetry between providers and consumers. There is limited information on price, service, and quality out in the open market. In any free and open market, the key parameters of competition tend to be price, timeliness of the service delivery and the quality of the service itself. This creates a big hurdle for Individual Innovators and small businesses in accessing suitable, timely and quality services for protecting their research.

In the current setup, Service Providers are not incentivized to be transparent about price or to compete on offering value for money and unique services. In fact, the lack of open data in the market allows some providers to price discriminate without necessarily losing customers. The price dispersion resulting from the lack of transparency means that some consumers are paying more than they need to for services where cheaper prices are available.

Service recipients, on the other hand, lack awareness about these services which limits their knowledge of the market and reduces the ability to shop around. Further, there is a general perception that these types of services are expensive, which leads to concerns about cost and affordability. Perceptions of cost contribute to consumers not seeking formal advice. This opaqueness further discourages less well-known types of the service providers as they are less likely to be approached and may not get an opportunity to display the value for money or innovativeness of their offering.

Conventionally, an Innovator who has come up with a new solution seeks to protect his work through statutory available protection regimes. In order to achieve, he/she needs to select a service provider well versed in the said domain. Many consumers are unaware where to find such service providers. Others, who venture out on their own to identify suitable service providers, generally, look upon parameters such as feedback/recommendation from family/friends, location, direct price, quality information and reputation of the service provider. However, Consumers are unlikely to be able to judge the quality of the advice provided since they are themselves not an expert in the given service field. Further, opportunities for consumers to learn from repeat purchases are limited since there may not be multiple IP related transactions done by an individual or small business to build a lasting relationship with a service provider. This difficulty of observing quality directly can lead consumers to rely on recommendations to choose a provider, rather than trying to research what the sector has to offer in order to find a provider themselves. It also means that the service provider’s reputation becomes an important dimension of competition, thereby limiting a consumer’s ability to seek or consider alternative offers available in the market. One lifesaver technique for an amateur or new consumer in a service field are the user ratings for a given service provider. However, owing to lack of any open platform for price and rating comparison, the only place for such user ratings remains is the service provider’s website itself which appears to be more promotional and not a genuine assessment or testimony of customer experience.

The need of the hour is an ecosystem platform that encourages open marketplace for services pertinent to Innovation lifecycle which would eventually boost innovation index and encourage participation from more innovators into formal protection regime. Consumers need service providers to be transparent about the price and quality of what they are offering in order to choose offers that represent the best value for money to address their legal needs. The ecosystem should promote:

· accessible services;

· innovative new services; and

· competitive pricing structures.

The ecosystem platform allows competition between service providers through competitive bidding processes. It may also limit the opportunistic behavior of the service provider as they face the possibility of losing future work opportunities if the poor quality is revealed. This generates a virtuous cycle for the competition where providers are driven, by informed consumers, to compete and innovate in order to improve the value of their offering and to win custom. Reputation mechanisms enable consumers to benefit from information on the aggregated previous experience of other users when they choose their provider. These reputation mechanisms include published consumer feedback, such as online reviews, accreditation/certification schemes that signal a higher level of quality and the development of recognizable brands with a reputation for high quality.

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