The practice of law has always been complex, but in the last decade it has evolved into much more than advising clients and helping them navigate the legal landscape. And now, if that’s all a firm can offer, they’ll soon find themselves out of work.
To stay competitive, firms must adapt to do more, offer added value and continually demonstrate legal expertise and knowledge of a client’s business. Today’s law firm must focus on what really counts—driving new business to the firm and retaining existing clients.
There’s also no question that the legal market has become fiercely competitive. As nontraditional legal service providers begin to steadily gain ground and in-house legal teams take a more proactive approach to their legal matters to reduce costs, savvy law firms are looking for ways to gain an advantage.
Subsequently, firms of all sizes are focusing their energy on big ideas that promise to deliver equally big results: client service, culture change, innovative technology, data analytics and process improvement. Each of these five areas individually represents an opportunity for growth. But together, they create a strong foundation for future success and lasting profitability. We call this holistic approach SmartLaw.
According to the 2019 Report on the State of the Legal Market, demand for law firm services has remained largely stagnant over the last nine years. This sluggish demand, combined with the rise of market disruptors, has already prompted many law firms to take action.
Despite being traditionally risk-averse, proactive firms have responded relatively quickly by launching initiatives that focus primarily on client service and technology adoption. These two areas are the easiest to tackle, and they admittedly offer quick wins with almost immediate, measurable results. But alone, they’re not enough to create lasting momentum.
Long-term, thoughtful investments in culture change, data analytics and process improvement will help sustain growth, though they do require more time to develop and refine. The longer law firms delay investing in these strategic areas, the further behind they fall. As George Beaton, partner in Beaton and cofounder of FirmChecker, Australia says in the ebook, SmartLaw 2.0, “For those firms that don’t start their transformation journey very soon, profitability will slide inexorably, and lack of succession will lead to extinction.”
While an improvement in any one area is beneficial, a focus on one area can not truly transform the firm. Without a plan that includes all five of the interdependent elements of SmartLaw, the firm will not be able to reach its full potential.
A foundation for the future
Each of the pillars of SmartLaw supports one or more of the others. For example, firms that prioritize a client focus often do so by adopting a culture of change. A strong culture of change fosters a new spirit of innovation and encourages lawyers and staff to experiment and use technology to improve efficiency, which delivers value back to the clients. The newly deployed technology allows for better, more consistent legal data collection. With more abundant and reliable data, technology can be leveraged to offer deeper analysis of legal processes that can then be optimized and automated to maximize productivity and deliver more value to the law firm—and the client.
Tactical improvements and quick wins in client service and technology combined with long-term strategies that embrace a culture of change, data analytic and process improvement will create a foundation of growth that last well into the future.
Mike Abbott, vice president of enterprise thought leadership and content strategy at Thomson Reuters, might have said it best in a recent post, “As client needs, expectations and behaviors are changing, we are seeing many firms adopt highly innovative approaches to drive greater efficiency, predictability and cost-effectiveness. Clients have more choices than ever for meeting their legal needs, and leading firms are now tailoring their strategies and delivery models to provide legal services in the manner that most effectively intersects with clients’ considerations.”
Explore the full infographic to learn more about the legal landscape and how SmartLaw prepares law firms for the future.