Every lawyer, from a partner to an associate, has to keep learning about everything they do. Regardless of your experience, the chance you have the best answer at all times drops by a vast margin. And it does so with each passing second, in this ever-changing world.
The business of law is changing. Many market elements are moving at the same time. Many are (quick to) declare the demise of the legal industry. Many believe the AI will disrupt and replace law firms (and I wrote my thoughts on that one too, commenting on Ron Friedmann ‘s piece).
Well, what if I told you that, as long as humans exist, the legal industry will involve people? In my view, people will ultimately be in charge of delivering the service, regardless of the tools they use. And there will always be buyers of legal services. Transactions will go on. I am not worried about the industry as a whole. But I do feel the industry itself is in the process of transformation. Hence, in this article you will read some points that you need to consider if you want to be on the winning side.
1. Be flexible and have an open mind
You must be open and receptive to new concepts. Never stop learning: It will make or break you in the long run.
There is no limit to what you can achieve with your law firm business. However, you are limited in terms of the resources and you will have to prioritise. Imagine you have identified an area to improve.
For example, obtaining new clients. If you refer to the blogosphere, you will find advice like “build your website, develop your niche, meet people, pay it forward to your community” etc.
Now, while all that is true, nothing on that list seems revolutionary. I feel you should still step it up a bit further. For example? You could be productizing your legal services, and catching more valuable work as an upsell potential in your funnel. (Click here for more info and a real example from Lucent Law.)
2. Choose: legal profession, or the business of law?
Many practicing lawyers consider legal service delivery to be a profession. Those who do, frequently use that to justify their resistance to change. Other, more agile and entrepreneurial lawyers, consider serving clients to be their business. But what is the difference between those views? As it seems, not much unlike the difference between a tailor and an apparel company:
If you want to be a business(wo)man, you cannot act as a mere tailor. Forget about the whole “bespoke” narrative. Accept that you will have to drop the traditional billable hour business model and turn to value-based pricing, even for hourly based legal projects. Learn to discover the problems of your market niche.
Then build systems to solve them. Don’t wait for clients to tell you what they want. Find out what it is and give it to them before they even ask. At least engage in a collaborative dialog with the client and achieve an open working relationship built on trust, transparency and real time information sharing and decision making. This is the ethical foundation of all attorney/client relationships.
3. Be aware of the fierce competition and act
Who do you compete with? Who is working relentlessly every day to take your market share? Did you ever stop to think about it? While obsessing about competitors is unhealthy, you must understand your competitive landscape.
But the question seems easy, right? To answer, all you need do is analyze your local law firm listing publication, filter by niche area, and compile a list relevant for your locale or region. Well, that is only a start. Law firms that you identified by using the said approach are DIRECT competitors. However, this list does not answer your question fully.
So rather than asking “Which other law firms do what I do?”, ask “What alternatives (other than my law firm) can satisfy my client’s needs?”. Only ten years ago (as of the date of publishing this article) the legal industry was oblivious to alternative service providers. Granted, there were some notable exceptions. However, by and large, almost no one was concerned by non-law-firm players in the legal service market. Forward to 2013, and the trend becomes more solid. So much so that Eric Chin, strategist to professional services firms at Beaton Capital, coined “NewLaw” - the new term that will differentiate those novel legal service providers that use a much different business model than traditional firms.
4. Reconsider your law firm’s business model
In my “Can Law Firms escape their Kodak moment?” for the Legal Business World, included the Kodak’s demise case study. Kodak did actually try many things to remain in business and retain their dominant market position. Namely, they invested in RnD, they purchased state-of-art technology, they even leveraged internet photo-sharing start-ups as their lead funnel. The only thing Kodak did not do? They did not change their business model. They decided to stick with printed photographs: they believed people would ALWAYS want to make printouts.
You can RnD all you want, and use expensive tech, if, however you do not pay attention to your clients’ needs and desires, ultimately, you will fail.Innovation is not about technology. Technology cannot be a purpose, an end in its own right. Technology is a solution, facilitating your business model.
It empowers you to do more, faster, and better - of what you already do.E.g. if all you do is billing by the hour, well, technology will assist you there. Will that be what your clients ultimately want?
5. Legal project management & tech for your agile law firm
Consider also the following - if you are going to be suiting up for the future of law, legal project management is a must-do practice. Additionally, you will need a technology that can support your project management practices. It may sound like a complex subject, but Legal Project Management merely represents a discipline that makes sure your clients get their services on time, in line with the agreed budget. Quality of service is a given, of course. However, sometimes law firms and partners object to legal project management [LPM] simply because their “clients never asked for it”. And their argument may be very true, but clients are asking for the results that Legal Project Management delivers, e.g., greater fee predictability, more value for time spent on matters, increased efficiency, more transparency into how matters are handled. While clients literally may not be asking for LPM, that does not make it a valid point in this discussion. In fact, many firms admit that requests for proposals from corporate clients uniformly inquire about the firms’ LPM and PI protocols.
LPM is essentially about understanding a client’s needs and priorities, which includes their appetite for risk. For example, if you have a boutique commercial law firm serving corporate clients, you probably noted your clients are not comfortable with risky and confusing situations. They trust you with their problems, and your responsibility is to provide a solution.However, the outcome is not the only value for your clients. The experience your clients have under your guidance is equally important. In mature markets, such as the business of law, competitors are differentiated by customers’ experience of their service. Do your clients need Legal Project Management? Pamela Woldow, Principal of Legal Leadership, has a useful chart to help your thought process: