Scanning all of the “Law Firm Trends of 2013” articles from the likes of Lawyers Weekly, The Edge Group International, Hildebrandt, Altman Weil and assorted other experts, here is my take on four trends and their marketing ramifications.

  1. Legal Outsourcing: India is still alive and kicking and filled with good first world-trained lawyers perfectly capable of provided great work for a fraction of the cost elsewhere.  The internet gives clients greater access to legal research but you can also hire on-line resources to do something more tailored.  Or heck, just download WiseLii” , a new free  mobile legal research app for Canada. How can law firms possibly complete?  Don’t.  Instead, incorporate these cost-saving resources into your work teams.  That’s right, hire them – selectively – to do commoditized work that frankly, they can do more efficiently.  Our clients want cheaper services and greater transparency.  Show them we can tightly manage files by utilizing cheaper alternatives on for discrete services .  Will we lose money as a result?  I don’t think so.  Most firms who believe they have the vast majority of their clients’ legal work only have a portion of it.  Loyalty (work volume) goes to those who best serve the client.  What you lose in a few billable hours of lower level work, you can make up in work expansion in the higher billable work.
  2. Inside Sourcing Realities: The pool of resources for client and file teams is shifting.  US stats show that law school applicants are dropping by more than 10% per year.  Legal industry observers are all predicting an increase in contract lawyers in the coming years.  Meanwhile, competition for traditional ‘lawyer work” is coming from all over the place, including inside the firm where as a matter of course, paralegals are now doing work that associates and even partners used to do five or ten years ago.  As an in-house marketer I frequently assisted with file or client team staffing decisions, especially on RFPs and pitches.  To win the work, I would focus on the most efficient teams possible and sometimes that might mean fewer partners, the inclusion of fixed fee contract lawyers, adding some paralegals, the creation of templates for lightening quick processing of repeatable legal work, etc.  Pushing the old law firm model of a bunch of partners, a few associates and maybe a paralegal won’t cut it anymore.   Instead of fighting the trend, use it to find a more cost-effective way of servicing the client.
  3. Business Diagnostics: Law firms have come such a long way in terms of their own businesses process, but most realize they are way behind in terms of business sophistication.  And it doesn’t work anymore to simply raise rates every year to keep the model humming.  Instead, smart firms are engaging business analysis experts to diagnose business problems and make suggestions for greater efficiencies.  This often results in sudden annual spending caps (or drastic budget reduction) for administrative departments, and the fastest way to deal with those demands is to sell off assets (fire/buy out people), and cut back on planned spending (don’t upgrade this year).  Marketers should treat cost reduction requirements like crisis communication: get out in front of it for better control.  Accept it as a business reality, and then constructively and logically manage the process.  Make a three year plan to determine a baseline of what you need to accomplish, and a corresponding resourcing needs chart (people and money).  Then negotiate with the firm over deliverables.  For example, if they want 115 events managed this year, you’ll need a minimum of three staff members.  If you can only have two staff members then the firm will have to cancel a portion of those events, etc.   Great business processes align projected outcomes with resources needed to attain them.
  4. Rise of Boutiques: Mergers are on the rise again, but predominantly with smaller firms (under 20 lawyers) banding together or being engulfed by larger firms. The big news, however, is only whispered behind the water cooler where we are increasingly hearing about groups of lawyers leaving the bigger firms to form boutiques.  Why would they leave the gravitas of a big name to run their own shops?  Conflicts are killing the spirit of a lot of big firm lawyers so boutiques can allow for easier business development.  Also, boutiques tend to be cheaper to run, giving the clients a differentiating break on legal costs.  For marketers in big firms, understand that while you build an amazing business segment within the firm, the leadership may (and should) worry about possible defection.  They’re going to want to see strong teams fully integrated into the rest of the firm.  Implementation of strong client teams is a good way to do this.

I didn`t include reference to AFAs here because I believe that to be done well, they require work process re-engineering as well as an alternative fee structure to the billable hour or discounts.  And in my experience, most law firms and clients still lack the trust in each other to go there fully.  But that time will come and when it does, law firms will need to adjust their management and compensations systems to accommodate it.

In fact, all of these trends suggest the need for changes by law firms.  I`ve always felt that if change is inevitable, I`d rather be driving it than trying to figure out how to catch up.  The trick is to embrace the trends and figure out how to use it to your advantage.