To stand out from the crowd and win new work, lawyers need to be good at more than the law. This was one of the key takeaways from a recent Legal Futures roundtable we supported, on the profit growth challenge faced by SME law firms.
Click here to download the roundtable report: Profit motive – increasing margins in challenging times
Growing the profit margins at a law firm advising SMEs boils down to two simple goals: win new clients, and serve existing clients profitably. These were the top two picks for law firms we surveyed last year when it came to the key issues for 2017. But to win a new client, lawyers have to ask them to pick their firm above all others. It’s a question so simple as to be trite, but why should they do that? What do you have that other firms don’t?
Looking around your office you probably see a bunch of well-educated, personable lawyers, knowledgeable in the practice areas they service, delivering top-quality advice that clients can trust. Unfortunately, that’s what all your competitors see when they look around too. Partner-led legal advice that’s up-to-date is a given (or at least it should be) – it’s the very least that clients expect when they retain a law firm, a decision which is, by any measure, expensive.
A clear message that emerged from this roundtable was that, to put it crudely, you can’t differentiate yourself from other lawyers by being the most lawyerly lawyer out there. As Paul Bennett put it beautifully, a client – a layperson – in most cases “cannot distinguish Gareth [Brahams’] employment advice from a high street firm’s or from mine. They will judge on whether Gareth or Paul calls them back quickly… As lawyers, we are going to be judged on our service, not the quality of our legal advice.”
This is particularly true for winning new clients. After all, the accuracy of your legal advice is only apparent after winning the instruction, and in some cases a long time after the work has been completed – so how can this be a key differentiator in winning new clients?
The shift in mindset to recognise that you are, or should be, an entrepreneurial lawyer –“businesspeople selling law,” as Rachel Stow put it – may be hard to grasp for everyone in the firm. The equity partnership model is, after all, designed to fill a pool with profits for the partnership and drain them out periodically.
This can limit the appetite to do things faster and cheaper, and minimise contact with clients through technology, but clients are driving change at the very top of the market and this will inevitably filter down to law firms advising SMEs. This is being driven by a twin-pronged attack from competitive pressures, and the economic uncertainty in the aftermath of the Brexit vote. Against such a backdrop, clients feel comfortable making their demands plain.
To read the full report, from Legal Futures in association with Thomson Reuters, click here to download: Profit motive – increasing margins in challenging times
