Traditional survival tactics may not be enough to weather the storm ahead
Rough times lie ahead, 95% of independent lawyers and midsized firms have predicted in this year’s LexisNexis Bellwether Report.
While last year’s report revealed rising confidence among lawyers, this year’s records a dip back to the gloom of 2013/14. The Bellwether Report 2016: The Riddle of Perception also found a mismatch between the key challenges that face lawyers and the changes prioritised by lawyers in response. It concludes that traditional survival tactics may not be enough to weather the storm ahead.
85% of lawyers agree that client demands are having as big an impact on working practices as regulations, yet only 40% of firms have taken on more staff to meet those demands. Taking on non-fee earners to help develop business and increase efficiency is also quite low on the list, even though a number of the main challenges faced by lawyers lie outside their skillset.
Professor Stephen Mayson, independent adviser and non-executive director to law firms, says: “The report provides evidence of ‘the grand delusion’—essentially, a culture that is out of tune with the market and a broken business model.
“Tinkering around the edges of the cost base and blaming others for the rest, rather than tackling some possibly uncomfortable home truths, will not address it and secure a sound future. But there is hope.
“The report also shows the correlation between growing, successful firms and other identifiable factors. The foundations lie in firms actually doing something about the fundamentals of their business through entrepreneurialism, thinking outside the legal box, focusing on client value and their experience of service delivery, specialisation, re-staffing, and the appropriate use of technology.”
The report is based on interviews with 122 independent lawyers and 108 clients. It argues that clients want value for money: a good service at a fair price—not a cut-rate service at a cut-rate price. It suggests that lawyers have yet to fully absorb the distinction between price and value.
“The recurring theme in this report is the expanding gulf between perception and reality for independent lawyers in a rapidly changing world. Specifically, it is about the growing disconnect between what lawyers value and what is important to their increasingly powerful client base,” says Jon Whittle, Market Development Director at LexisNexis UK.
“The research indicates that independent law firms appreciate the need to constantly change and evolve, but the focus and business skills required to win often fall outside their traditional, professional training, experience and comfort zone of many of those gearing up for the future. Nevertheless, it’s encouraging that the legal profession recognises the challenges it faces. It must now step out of its security blanket and embrace business practices, technology and new ways of working to overcome the issues with which it is confronted. It’s a business imperative.”
