“Adapting Law Firms for a Buyer’s Market”
Highlights from Jordan Furlong’s Presentation to the PSALA on March 8, 2018
By Leslie Meagley, Meagley Strategic Marketing LLC
Jordan Furlong’s recent presentation to the PSALA provided a dizzying walk through the forces of change that our law firms are facing and how to respond. Despite his sobering predictions, he is chock full of optimism and practical recommendations for firms that are embracing the forces determining our future.
3 CHALLENGES – THE SHIFT OF POWER TO THE BUYERS
Jordan’s talk and the first third of his newest book focuses on explaining how “the priorities of the buyer are now emerging as the dominant force in the legal market” challenging our point of view, how we provide services and the structure of our law firms.
A. CLIENTS have a new purchasing mindset. With access to data about billing rates and deliverables from other firms and colleagues, clients have become more assertive. Procurement and legal operations specialists are increasingly involved in purchasing legal services, and that’s changing how we need to think about delivering value.
B. Clients have new CHOICES to solve their legal problems. Low level legal work is increasingly moving away from law firms thanks to a) a significant rise in legal process outsourcing firms like Elevate, Axiom, UnitedLex; b) new technologies that simplify, streamline and automate traditional in-house tasks and that offer online solutions for individuals, and c) competition from other service providers like the “Big 4” accounting firms.
C. These pressures are challenging the COHESION of the traditional law firm business model. The imminent retirement of significant numbers of partners is catalyzing transition issues. Millennials are challenging traditional assumptions about how we work. And, at the macro level, it is increasingly difficult for laterals to transport a book of business to a new firm.
It’s naïve to think that anyone trying to introduce new ideas into a law firm won’t face significant pushback. Vision is key. (As Jordan pointed out, “Once we have a vision, we can create it.”) But, the immediate challenge is helping our attorneys and staff understand and embrace the opportunities ahead of us. Which makes small wins so important. Here are 6 groups of ideas to create those small victories.
1. Restructure our practices around our clients. We need to understand our clients’ point of view. While larger firms can form industry-focused groups or multidisciplinary client teams to become informed about our clients, even small firms can ask for feedback and make simple changes that upgrade their experiences with our firms.
2. Optimize our operations. We need to operate with the efficiency and productivity that clients now expect. We need to standardize and streamline, beginning with the critical question, “If we weren’t already doing something this way, would we continue to do so?”
3. “Compete to dominate” in select areas. Firms don’t have the resources or time to be “best in class” in every practice area. If we want to be doing the best work for high profile clients and getting premium rates, we need select and then double down on a few targeted areas.
4. Run our firms like the businesses they are. We need to reframe how we look at billable hours to consider value in our mix. We need to invest in the R&D to understand how we can create initiatives—even small ones—that will delight our clients. And, we need to boost incentives that reward the marketing, management and professional development that are critical to the long-term health of our enterprises.
5. Diversify our personnel and include “non-lawyers” into client service delivery. Countless studies have demonstrated that diverse teams—teams that include professionals at multiple levels, as well as women and people of color—deliver better solutions- and more value to clients.
6. Most importantly, our firms need to strengthen our enterprises. Rather than simply hiring the best lawyers, we need to build strong organizations with cultures that live up to our values and purpose.
Law firms face a bright future, provided we understand the forces we face and embrace the opportunities to deliver higher value to clients and improve the satisfaction of our lawyers and staff. Jordan provides insightful analysis and excellent ideas for anyone ready to work toward that vision.