The evolution of the legal market – Predictions

August 02, 2019

Undoubtedly, changes caused by the Legal Services Act (LSA) will diversify the legal profession forever. From my viewpoint of the sector, I see a broad spectrum of firms innovatively adapting in the wake of Alternative Business Structures (ABS) and believe a good number will succeed.

Physical workplaces and support staff ratios will shrink

Whilst established law firms have traditionally operated with a high cost-base, a new breed of law firm has been emerging. These firms are using IT extensively to reduce the support staff to fee earner ratio whilst swapping
central urban locations for more economical ‘out-of-town’ premises. Some are even operating without traditional workplaces instead opting for a modest admin/support office with all fee earners working from home, connected
to a centralised system accessed via the internet. So we have the rise of the virtual practice.

Choosier clients will increase demand for CRM within firms

As it becomes easier to make service and price comparisons on-line, clients are likely to become even more selective when choosing a solicitor. Clients have the potential to become less loyal and law firms can no longer rely on repeat business as a matter of course. The progressive law firms will define and decide what they do well and communicate that to the market. They will develop client relationships with proactive cross-selling of additional services to nurture and build long term relationships - just like any other modern business. And like any other business, they will need modern tools and business methods. Customer relationship management (CRM) systems will help them know their clients better, predict the value of potential new business opportunities and ensure enquiries are converted.

Improvements will be made across entire firms informed by the client’s eye view

Over the last 3 years, another strong trend has been the focus on business process management (BPM). BPM is replacing separate case management and accounts (or front and back office) projects with projects that address
firm-wide processes from the overall experience of the client. BPM projects are tending to unite accounts and case management, incorporate CRM more widely and allow for client interaction. All firms will need to map out and improve their entire operational activities and re-engineer their systems to underpin the client journey throughout the firm; everyone needs to focus more on the client experience.

More on-line legal services will level the playing field

Many new ABS entrants will be focusing on the delivery of legal services over the web and law firms will also need to be able to operate this way should they wish to compete particularly in the ‘commoditised’ arena. Neither is it likely that these on-line services will just apply to private client work, with small to-medium businesses being the target of these on-line ABS’s also. However, whilst few law firms will have the marketing budgets of the bigger ABS players, through the effective use of comparable technology, all law firms both existing and new, have the potential to compete and differentiate.

The franchise model will help some law firms succeed

The franchise business model is well suited to the new legal landscape. Firstly, the model enables smaller businesses to compete against national brands in a way that would be herculean for an individually-branded firm. Secondly, the model allows for much of the cost overhead to be removed by delivering efficient systems, processes and compliance that franchisees can simply ‘plug into’ rather than have to re-create themselves.

Change is inevitable – IT is central

To conclude, all these predictions have a major reliance on technology and it is unquestionable that IT will be central to the future success of law firms: underpinning the customer journey at every point of contact; helping with compliance and OFR; generating and developing opportunities; driving down costs; centralising information, uniting departments and empowering organisations to achieve high levels of efficiency.

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