In September, we hosted The Legal Industry Pressures Forum designed to tackle legal industry challenges. During the forum, Dave Cupar had a chance to give his perspective as the head of the intellectual property practice at McDonald Hopkins.
As our industry continues to evolve within the 21st century, we are faced with obstacles that grow each year.
Technology, alternative legal service providers, the internet and today’s changing economy has created barriers for firms. All of this comes down to one main point: we have transitioned from a scholarly legal transactional model to a consumer-driven model. Our clients have needs that require much more creativity and innovation.
The Problem
The largest law firms in 2018 saw an increase in demand, while the rest of the law firms rode flat. Since the Great Recession, 10% of realization has gone down. Rates have risen while demand and productivity have decreased, signaling that profit margin has generally remained flat. This should concern any lawyer.
Throughout history and based on general economics, we know that stagnation means inevitable failure. If you aren’t moving forward, then you will eventually move backward. Through rising competition and increasing expectations of our industry, we have to find innovative ways to meet the needs of our clients.
The following are ways we can innovate within our industry.
1. Develop a Powerful Value Proposition
What are you bringing to the table? In the legal profession, we are consistently under pressure to show our value to our clients. They want to know what they are getting when they hire our counsel.
Your value proposition should be very clear. When a client hires you, they know the exact legal services and value to expect. But in this competitive field, we need to provide much more than a transaction. We need to work with them, ask about their budget, and develop legal plans to develop strong portfolios and strategic processes.
Most companies in today’s economy are facing an enormous amount of competition. They don’t have the resources to spend on anything that has not been strategically and carefully analyzed. It’s our responsibility to work with our clients and find options that work for them. When we cut out services based on a lower budget, it will also increase our value. Clients will see this and once they trust our services or have the resources, they will add on more value.
2. Communicate Effectively
“Be clear, be clear, be clear.” – Napoleon Bonaparte
The biggest thing in our industry is communicating effectively. Our clients are busy and they don’t have time to sift through unnecessary or confusing information. The days of long, tedious memos are over.
When you communicate in an email or message, say only the necessary. Remove all obstacles that would prohibit your clients from reading it or not understanding the message.
When you simplify your language and say only the necessary, you remove all the noise. You become a pleasure to work with. Your productivity and speed of communication will improve with your client. Not only that, but your value will also increase when you learn to speak their language and collaborate as a trusted lawyer.
3. Change Your Attitude with Alternative Legal Service Providers
Our initial attitude towards ALSPs is a fear of competition. But the minute we learn to use them as an advantage, the more we can benefit from it.
When we work with ALSPs we can effectively outsource some of our services so that we can use our time on the more demanding side of our work. We can say to our clients, “we are working together to provide a better solution than others you have seen in the past.” The collaboration will strengthen your value and service.
4. Adopt Legal Tech
This is the area of innovation we need to pay attention to most in the future. Silicon Valley has yet to fully explore this side of the market, and the opportunities (and chances of missing out) are increasing by the day.
The future of tech in the legal world will be ways to automate, streamline, scale, benefit communication, and promote our services. Imagine using tools on your website, Search Engine Optimization techniques, and social media, to reach, retain and gain new clients. Not only acquiring but servicing others online. The costs are low compared to other investments and the earning and client potential is limitless. Find ways to increase your firm’s ability to adopt tech.
These are a few ways we can be innovative in our field. Legal services are increasing, but existing firms face high competition. With innovation, clear communication, technology, and collaboration, we can get ahead of the game.