Law firms must evolve and innovate to meet key market challenges
Tuesday, 11 November 2014
“The most agile legal firms anticipate change and adapt their working practices, systems and processes to meet evolving market forces.”
This observation, taken from our recent white paper, sounds like a straightforward piece of business advice. However, the realities of keeping pace with a fast-changing market have proved beyond the capabilities of many law firms. With several highly publicised failures in recent years, including Halliwells, Cobbetts and boutique firm EOS Law, and a near miss for Linder Myers, the call to arms is to evolve and innovate.
Our white paper identifies four key challenges affecting the legal sector - an increased pressure on fees, evolving client demands, the introduction of alternative business structures and new working practices - while exposing the negative impact on fee income, client loyalty, service provision and employee retention and collaboration.
The growing demand for fixed fee services, particularly for non-contentious legal matters, combined with the increasing number of firms offering heavily discounted fees, has had a significant impact on firms. As a steady stream of alternative business structures enter the market, more established players need to demonstrate to clients they are doing everything in their power to provide value. This means managing workloads smarter and tackling obstacles to efficiency with rigour. In order to remain viable, some firms have merged together, while others have been forced to shut their doors permanently. In fact, the Legal 500 report 2014 warns of more consolidation in the legal market, particularly in the North-west of England, with clear evidence of ongoing market turbulence in Manchester and a contracting legal market in Liverpool.
New entrants to the market also include an increasing number of “virtual” firms, who utilise a blend of employed and non-employed practitioners on a lower cost basis, many of which work remotely. This model is likely to grow, as firms continue to focus on lowering operational costs. But while the virtual model brings opportunities for new revenue streams and client acquisition, it also brings fresh challenges. Firms may not need to employ as many office-based staff, but those that are in the office are increasingly keen to use their own devices in the workplace or when working remotely. If client service levels are to remain uncompromised, managing the twin trends of Bring Your Own Device (BYOD) and mobility demands an effective communications platform.
Of course, passing on cost savings isn’t the only driver. Law firms must get closer to their clients, developing a deeper understanding how they work and providing information gained over the course of a relationship to help guide future decision-making. By evolving business processes, systems and services, law firms can achieve a sustainable competitive edge but only if they are prepared to reinvest in the IT infrastructure and communication solutions that underpins a client-centric strategy.
Unified communications (UC) should be at the heart of this new investment. Deployed effectively, it can accelerate competitiveness by offering a differentiated and personalised client experience, improved tracking and measurement for billing, greater collaboration between staff, and enhanced client service delivery. With increased competition across the legal landscape, unified communications offers firms a cost-effective way to differentiate their brand, in what has become an over-crowded marketplace. Is your law firm ready to innovate?
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