Notorious R.O.B.

In Part 1, I explored how large law firms and big brokerages are similar, based on the forthcoming paper by Glenn Reynolds, a law professor and blogging pioneer.  Then in Part 2, we looked at how they’re different in some fundamental ways, particularly compensation models, that makes the size of Big Brokerage appear to be all of the disadvantages with none of the advantages.

In this Part 3, I would like to explore how size could be made relevant again.  There are still areas where size does matter, even in real estate.  And the future of the industry really depends on how big brokerages respond to the rapid changes in the social and economic marketplace.  Up to this point, most have been extremely slow to react, believing that a strategy of evolutionary adaptation makes more sense than a risky revolutionary act.  I no longer believe, if I ever did, that slow evolution will get the job done for the giants in our industry.  The window of opportunity is closing, and quickly at that.  Unless something fairly dramatic is done, and soon, I believe that by 2020, the large brokerage as we know it will be a thing of the past.

So, with that Cassandra moment out of the way, what are the areas where size still matters?  And how might big brokerage respond to make size matter once again?

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In Part 1 of this series, I examined a scholarly paper by one Glenn Reynolds(aka, Instapundit, who is a law professor, the author of Army of Davids, and one of the most important and influential bloggers in the United States today) about the future of big law firms and drew some lessons about how big law firms and big real estate brokerages are similar.

In this part, we focus on how they’re different.  And before you say, “Duh, Rob” (or since you’ve probably already said that, before you say it again), of course lawyers are not realtors, and law firms are not brokerages.  But there are lessons to be drawn from some of the fundamental differences as they go to issues of business models.

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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.

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First, go read this series please.  It is a 20-part series by a practicing attorney on “What It Takes to Be a Great Trial Lawyer”.  An explanation of the series and its goals:

As I said in my first post on this subject, a great trial lawyer need not have all of the attributes set forth in this series of posts.  Admittedly, the “great trial lawyer” hurdle has been set  high.  Very high.  Indeed, if complete fulfillment of all of these attributes is required, the great trial lawyer may not exist at all.

These words and  high standards are not meant to discourage lawyers from embarking upon the path to becoming a great trial lawyer.  Every time a lawyer meets one of these super-standards clients will be better served,  professional reputation will be enhanced, and profession satisfaction will increase.    Thus, I believe that virtually every trial lawyer, even those who choose not to make the commitment to be a great trial lawyer, can benefit from the thoughts expressed in this series of posts.

These writings capture and applaud what I have observed  in lawyers whom I truly admire.  It includes observations I made while following my father around courtrooms in Central Wisconsin four decades ago,  insights I gained in  law school during an unforgettable speech by Ramsey Clark and discussions with a number of extremely competent professors, and my experiences during my  almost 27 years at the Bar.    As I mentioned at the beginning of this series of posts, the work of my mentor, John T. Conners, Jr., put me in the position to learn much of what I now know.

Second, I may write a lot of stuffzorz on industry and marketing and so on, but really, there’s no way I can offer anything on what it takes to be a great real estate agent.  But some of you can.

So I challenge you — all of you who are qualified — to put pen to paper (virtual paper even) and write “What It Takes to Be a Great Realtor”.  If you send me links, I’ll link to them.  Hell, I’ll put up a permanent page and put all the links up.  But don’t do it for me — do it for yourself, and for the others who could learn from your collected wisdom.

I would love to see smart, experienced, with-it Realtors really get down and dirty with something like this.  As a former lawyer, reading the Trial Lawyer series really resonated with me — mostly reminding me why I would never have been a good trial lawyer.  The industry needs something like this.

-rsh

While I managed to escape the fate of practicing law (except for a summer experience, which is to actual legal practice as Barbados is to Mogadishu), I still have a great deal of affection for, and interest in, the business of law practice. In fact, I wrote an entire series musing on whether real estate firms should become more like law firms.

And one of the blogs I find most interesting is Real Lawyers Have Blogs (which is shortly getting added to my blogroll). The author, Kevin O’Keefe, is a recovering attorney who writes on social media, interactive marketing, technology, and overall observations on lawyers and law firms. His blog is really worth a read.

His most recent post was on lawyers and social media, and given how much we’ve been talking about social media in RE.net, I found his observations fascinating.

For starters, Kevin believes that for lawyers, social media boils down to three tools: Blog, LinkedIn, and Twitter.

Now, the blog thing, I get — completely. Especially for a lawyer. Realtors deal in houses and human beings; lawyers deal in words. If you can’t blog as a lawyer, you probably should be thinking about finding a different profession, simply because churning out 1,500 words or so for an informal blog post should be just about the easiest thing in the world. (ED: Yeah, look at your inability to use fewer than forty-eight words to say, Hello. ME: Shut it!)

As Kevin so wisely points out, the blog is the cornerstone of any social media effort:

Blogs? Got to have one. How else can you develop a central place where clients, prospective clients, and the influencers (bloggers, media, and social media hounds) pick up on your passion, philosophy, reasoning, and skill? How do you get seen when people search for info? You think I’m picking a pig in the poke by reading a lawyer profile on a website or Martindale? That’s nuts.

I think that entire paragraph applies directly to realtors as well.

At the same time, I know that I’ve been known to urge realtors to stop blogging altogether. But as I explained in that original post, my point is that a bad blog is worse, far worse, than having no blog. Yes, every realtor should have a blog, but it should be a good one. And if a realtor isn’t a good writer, then he should do video blogging or podcasting or some other way of showcasing his passion, philosophy, reasoning, and skill.

A lawyer, who trades in words, has no such excuse. If you can’t write, and you’re an attorney, you need to get out of the business.

LinkedIn makes sense for an attorney as well. As Kevin observes:

LinkedIn? LinkedIn has won the professional social networking/directory space. The race is over. I get invites from professionals inviting me to join their network elsewhere. Other than LinkedIn and Facebook I ignore them.

For attorneys who tend to focus far more on businesses and professionals, I can see how LinkedIn is the ideal network.

In contrast, I’m thinking that for realtors, who want to connect with consumers, Facebook is probably the superior platform. There are other platforms out there, of course, such as Trulia Voices and now Zillow Advice but neither have (as yet) the reach of Facebook. And frankly, neither is likely to ever achieve the reach of Facebook.

The big one is Twitter. This is a tool that some folks in the RE.net have more or less given up on, while others are extremely skeptical of its value. In contrast, Kevin could not be a bigger fan:

Twitter? Single biggest learning, brand building, network expanding, and reputation enhancing tool for me this year. Twitter’s influence is what took me off this blog so much in the last couple months. Twitter is no longer an experiment for me. Like Guy Kawasaki and Robert Scoble, I’d rather go without my cell phone for a week than Twitter.

Some people will tell you Twitter is a waste of time. Ignore them. Twitter, like everything I’ve discovered on the Internet in this crazy last 13 years, was confusing as all get out when I first tried it. You get less confused by playing with something. Playing for a lot of people is called a waste of time. But you don’t grow by not goofing around. Ask Google.

If you haven’t watched the brief Scoble video interviewing Kawasaki, do so. Guy talks about other things, but Twitter is what amazes him. ‘I think Twitter is, arguably, the most powerful branding mechanism since television.’ Guy says that Alltop would be nothing without Twitter. [Emphasis added.]

Those are… some extraordinary words. The most powerful branding mechanism since TV? Okay, those are Guy Kawasaki’s words, but still. The single biggest learning, brand building, network expanding, reputation enhancing tool?

Wow.

And Kevin’s commenters — lawyers all of them — also express skepticism.  A commenter named Max Kennerly (a litigator, it appears) writes:

I just don’t know about Twitter. I’m sure it works wonders for Guy and Scoble — the primary business for both of them is to exert influence over the most wired 0.1% of the country, all of whom are on twitter. The perception that they are always on top, always on the bleeding edge, is very important to their business.

Not so important to my business nor, I believe, to most lawyers. They need (1) a good reputation among clients and lawyers and (2) to be noticed by potential clients.

I don’t see how Twitter provides any paradigm-shifting benefits to either. It helps you connect in a near-real-time, highly personable manner to maybe a couple dozen people. For most people, it’s microblogging, which is like blogging except without the benefit of showing any sort of expertise or ability, just endlessly links and pithy comments.

What’s interesting about this exchange for me is how different this observation is from the observation that Marc Davison and the commenters made about Twitter in real estate.  Here’s Davison:

But that great promise has yet to pan out. Instead of using this tool as a means to leverage valuable insights, real estate has turned Twitter into restroom wall where anyone with their fly down and a Magic Marker in hand can leave behind whatever childish brain fart comes to mind.

And here are some of the comments:

However, I’m going to respectfully disagree about Twitter. If you want to post market data, and give tips etc, that’s appropriate in a blog or other similar forum, even facebook etc.

Twitter is a medium that people don’t want to see fact, market update, real estate info, etc. It’s a medium to connect with people on a more personal level. Lots of people can post market data on their website, but what person shares similar life experiences?

Twitter has helped make friends within the industry as well as find people from my area that now subscribe to my market info. They didn’t find me on Twitter from my market data posts, they found me because they searched for words like Mac, iPhone, St. Louis, Football info, etc. (I will agree there is a lot of drivel on Twitter)

- Eric Stegemann

As the owner of one of the mentioned “taboos” (maybe 2 or 3?) I stand by all of my tweets. Twitter is a social gathering place and I have met wonderful local people that have become friends who at some point in life will need real estate service. I’ve been told by several that when that need arises I’ll be called on. Some of them I’ve met initially due to similar musical styles (thank you blip), some due to similar love of great television (thank you Denny Crane). All of this to say, we tend to be attracted to people who relate to us on our most common levels. Some of these levels aren’t a constant barrage of real estate facts and figures. It is the real life relationships that sometimes start in the most innocuous ways.

- Dale Chumbley

Twitter is a way to connect with people on a very basic level. It’s amazing just how much you can learn about someone — good and bad — in a medium like this.

Flood the Twitterverse with real estate updates, listings, and self-promotion and you’ll swiftly find yourself talking in a vacuum.

- Jay Thompson

So, naturally, the question is: why such a difference in approach between Lawyer Twitter and Realtor Twitter?  See for yourself by looking at these two legal twitterati: Kevin O’Keefe, and Doug Cornelius.

Is it that lawyers are naturally more reserved, naturally more concerned about ‘gravitas’ and ‘brand enhancement’ via Twitter, while realtors are more concerned about making ‘real connections’ and not flooding the Twitterverse with real estate updates, as Jay Thompson says?

Is it the difference between the two professions?  Is it the difference in the audience?

I have no answers, just questions.  But then… that isn’t unusual, right?

-rsh