Staying competitive in the legal market
With a continual procession of new entrants in the already overcrowded legal sector, competition between firms has never been greater. Law practices are using a variety of methods to gain and maintain a competitive edge over their competition, including investing in technology to improve client service, mergers, attracting staff via flexible working, and developing their brand by offering added value. It has also been reported that firms with greater diversity are acquiring mid-tier or niche practices in order to augment their existing services.
Regulation changes, in particular, the Solicitors Regulation Authority’s “Red Tape Initiatives” and the redrafted Solicitors Accounts Rules have all served to increase access to justice and increase efficiency. These changes are intended to increase supply and demand in the legal sector and resolve the issue of firms finding themselves priced out of the market, particularly as pricing transparency becomes more commonplace, with firms increasingly likely to provide prices on their website.
Some legal commentators are concerned the changes could turn into a race to the bottom and lead to a reduction in consumer confidence and dissatisfaction in the legal sector in general. It will therefore be up to firms to make sure they balance the drive to improve the current situation whilst not jeopardising quality.
The legal sector has also seen an increase in alternative legal services, which has led to a rise in competition. There have been a number of accountancy firms launching legal services, and the sector has seen huge growth in the number of “platform law firms”. In essence, platforms create an environment or ecosystem, allowing people and businesses to participate if they abide by rules and meet standards. These platforms allow lawyers to leave the more traditional firm structure behind, work more flexibly, and deliver services to a wider spectrum of clients. Lawyers in this kind of firm tend to be self-employed, decide their own hours and typically keep a higher percentage of fees charged, which, in turn, leads to fewer fixed overheads for firms because their fee-earners are working remotely and using shared services, such as IT, case management systems, and accounting software.
The key to success in such a highly competitive market is for law firms to get the basics right: offering incentive packages that attract and retain the best talent, and provide clients with consistent added value and an attentive service, whilst boosting this offering with specialist knowledge. Investing in technology, IT, case managements systems, which drive productivity, and improve efficiency, including the use of more controversial AI and automation, should all be things that are high on the agenda.
Branding is also an often overlooked, yet essential, consideration. Your brand is your firm’s persona: what it does, how it does it, and crucially, who it is. Branding is a relatively new concept for law firms, but the market is now almost completely consumer driven, which has led to image never being more important than it is now. Ideally, firms should ensure they are getting noticed by the clients they aim to attract, whether this is by building client engagement through advertising or increasing its social media presence. Firms need to be present in the minds of their target audience and invest in developing their brands and what it is they want to say. Because those with strong brands gain credibility, which encourages clients to instruct.
The legal market is experiencing challenging changes and firms are being given the ideal opportunity to individualise themselves and reap the rewards. Ultimately, your firm’s reputation and client perception are your brand. Find out what your clients regard as your strengths. How do they differentiate you from other firms? What do your client’s value? Why have they chosen you?
If you can match these, then you will be well on your way to establishing a robust and distinctive brand. A strong brand expresses itself at every client interaction and should become inherent to your culture. This manifests as a constant symbol of your firm’s heritage and core values, gives you a competitive edge and positions you for overall success.