Technology is redefining the way legal services are managed as well as the ways in which legal advice is bought, sold and accessed. Is your law firm keeping up? Here, we examine what law firms can do to stay competitive.
A stark change in the practice of law in recent years is that law firms no longer have the marketplace to themselves. In-house legal departments have grown in size and influence and are now expected to take on more work than in the past. In parallel, a range of emerging alternative legal service providers have created a digital marketplace for legal services, blowing a chilly competitive wind over the traditional cosy landscape of legal practice.
The long and short of it is that digital disruption has finally fully reached the legal sector. Consumers can now buy legal services online, so firms must now compete in a marketplace where clients can compare services as never before based on reviews, rates, discounts and other criteria – perhaps in future on factors including ESG performance, for instance. The old loyalties, which were based on relationships and meant firms could rely on keeping corporate and personal clients over the long term, have entirely evaporated. The question is: “What can ‘traditional’ law firms do about it?”
Embrace the change
The first thing firms would be well advised to do is acknowledge the change. Just as traditional shopkeepers might wish to fight the inexorable rise of Amazon, at some point it’s better to accept that it’s not going away. You must admit that the clock can’t be turned back and work with the new reality of a digital legal marketplace. But more than that – embrace the change. You’re still selling something that nearly everyone needs. And a digital legal marketplace is a greatly expanded playing field for law firms, potentially bringing forward millions more clients by making law more accessible and affordable.
Adapt to survive
Next, law firms must adapt to secure their futures in this new landscape. You can opt to offer niche specialist services – perhaps emphasising an already established area of experience and expertise. Or you can position as a generalist firm, a local firm, a discount retail firm… Whatever the branding, your competitors are embracing technology to shrink their cost base, or to do more with less, or to differentiate themselves in the marketplace, and you must too.
Transformation is a big, daunting word. But of course the process of digital transformation in the law is already well underway, and was greatly accelerated by the pandemic. Moving forward, it will probably be more incremental. Firms have to decide what they want to be in this new landscape and then start incorporating the technology that will move them towards that destination. This could be as simple as upgrading to a state-of-the-art practice and case management system that delivers an immediate boost to productivity and profitability.
Nor are goals mutually exclusive. You may aim to offer boutique legal services, but that doesn’t mean the firm shouldn’t look to increase efficiency with the adoption of, say, digital workflows or AI that automates some labour-intensive tasks such as time logging, or email filing.
Meanwhile if client service is more important – and in a highly competitive, consumer-centric environment, it should be – it might be more appropriate to develop a client self-service portal so that clients can transact some of their own legal business – such as form filling – more quickly. Or to enable client collaboration and document sharing, for instance giving clients immediate visibility of matter progress and billing via a state-of-the-art document management system.
Being a successful law firm in today’s legal marketplace will increasingly be much less about good word of mouth, and much more about offering value, seamless delivery and quality of the kind that gets consistently high client reviews. As legal service acquisition becomes easier and more transparent, it will be increasingly important to ensure your competitiveness. And the right technology solutions will undoubtedly make a big contribution to that.