Pocket Hercules (Photo by Sam Greenwood/Getty Images)
Aaaaand I can hear the tee-hee’ing going on in Costa Mesa from here. While I’m not above making cheap jokes in order to erect a logical argument about brokerage performance, business dysfunction, and customer satisfaction, this post is actually about serious issues in real estate, technology, and marketing. So stop giggling.
We begin with a question: does the size of a brokerage matter in real estate?
I have argued in the past that the Big Broker holds the key to the future of the real estate industry, and that small independents and boutiques will end up surviving on the good graces of the various titans in their markets. Of course, that argument was counter-factual at the time I made it (over a year ago now) and I conceded that as the industry was then, big brokerages were boned. What I argued then, and still believe to some extent, is that the Big Brokerage with the will to change has the resources to do so. But in the almost year and a full quarter since I wrote that post, I don’t know that I’ve seen too many examples of such visionary brokerages.
Meanwhile, technology continues its remorseless march.
Then comes this paper by one of the pioneers of the blogosphere: Glenn Reynolds, aka, Instapundit, the Beauchamp Brogan Distinguished Professor of Law at the University of Tennessee. If you’re at all interested in the impact of technology and of the Web (and its offspring, social media) on the real estate industry, I urge you to read it in full. While it is a scholarly paper published in a law review, it’s written in plain English for the layman, and does not deal with legal issues as much as it does with business and social issues.
The implications are profound, and the questions Reynolds raise are significant. And insofar as law is the epitome of professional services, and one that many realtors look to as an example of client-driven professional services, changes in the legal business model are something we should pay close attention to.
This will be a multi-part post, as the topic is large enough and complex enough to warrant breaking up into bite-size pieces. This first part focuses on understanding Reynolds’s argument as it applies to law firms, then extrapolating similarities to real estate brokerages.