Many lawyers are concerned with how their practices can remain relevant and profitable as the legal industry changes. There are many reasons for such concern. Although the legal industry is changing, however, it is possible to design a law firm that will sustain itself both today and in the future. To achieve such a solution requires mindful attention to the current state of one’s law firm and the industry as a whole. In addition to changes in the industry, changes in the workforce must be considered.
Be Clear About How Lawyers Add Value
Ask yourself the following question every day: “What are my clients willing to pay me for that is so important to them that cost doesn’t matter?” Whatever your clients value in that manner should be the focus of your services, your marketing efforts, and the direction of your practice. Define yourself, create your brand, and develop firm services around what your clients are willing to pay for without blinking an eye.
Lawyers provide various things that clients value. Being clear about what clients value is of extreme importance as the legal landscape continues to shift. Regular reevaluation is also important.
Clients are likely to value specialized knowledge and expertise. Although artificial intelligence and automation are becoming common with respect to certain aspects of real estate agreements and estate planning documents, lawyers will continue to add value by layering on industry-specific expertise.
Although a real estate leasing company may have a basic lease that works for most of the properties it leases, from time to time the company is likely to run into a unique situation, such as leasing to a marijuana retailer. A lawyer who can readily assist in dealing with a unique lease because of her specialized knowledge or experience will not be easily replaceable. Complex real estate transactions are not likely to be replaced immediately by artificial intelligence or automated documents. A lawyer who has significant experience in designing trusts to address the issues of a beneficiary with drug and alcohol issues will not be readily replaced by an online form. A lawyer who has relationships that can be utilized to help get a deal done or resolve a tax issue has significant value.
Know what clients value, develop the related skills and expertise, and communicate those skills and expertise through marketing and social media. Rather than referring to oneself as a “real estate lawyer,” routinely modify self-references to reflect the particular expertise that clients will value. For example, one could refer to themselves as a “real estate lawyer with expertise in designing closed-end funds.” A trust and estate lawyer might be best served by using phrases such as “tax, trust, and estate lawyer specializing in reducing income and estate taxes and protecting assets.” Every lawyer likely has several areas of expertise. Build all the areas of expertise into references in various forums. (Do be aware of any state ethical rules that affect what lawyers can say and how.)
Clients may also value having a lawyer take care of things the clients could do themselves but prefer not to. Clients may want to have routine needs handled systematically and automatically. Such services could be handling Crummey notices, filing 990s or 1041s, or automatically handling any routine filing requirements.
Many clients contact lawyers for the purpose of seeking assistance with avoiding risk. The lawyer who can assist clients with accomplishing their objectives (and not killing their deals) while minimizing the risk will continue to have value. Be the lawyer who can facilitate a deal while protecting the client at the same time. Be a valued consultant.
Client service remains important, and attorneys who give attention to providing excellent client service will remain relevant. Client service comes in different sizes and forms. Some aspects of client service are simple. For example, always acknowledge email from clients even if you cannot attend to the matter requested immediately. Provide personalized service and attention. Rather than sending out general newsletters, send personalized notes about needed updates or law changes that impact clients based on their specific structure. Be proactive and exceed expectations. Train everyone at your law firm in excellence in communication, responsiveness, relationship skills, and, of course, excellent legal work.
Understand How Consumers Are Buying Legal Services and Connecting to Lawyers
Traditionally, personal relationships and personal referrals were the primary way that lawyers connected with clients. The internet and social media have changed the way consumers find lawyers and utilize services.
The specifics of consumer buying trends are beyond the scope of this article, but generally individual consumers are finding lawyers online. Business clients still seek referrals, often through trade groups, but will review online information. If your practice is serving individuals, your online presence requires significant attention.
Develop a strategic plan for finding the consumers you want for your practice. Seek out consumer research on your specific practice areas. Design an approach to marketing that considers the buying trends of desirable clients.
Be a Thought Leader on Social Media
Social media can be used to quickly build a following and demonstrate a lawyer’s knowledge and thought leadership in particular areas. Twitter and LinkedIn are currently the two most important social media fora for real property and trust and estate lawyers.
Create a daily social media habit. If you start your morning reading daily alerts on real property or trust and estate issues, take a few minutes to create a post for social media. Follow others who post materials in your practice areas. Share the posts of others that provide good information, but make sure to add your own comment.
Develop a Culture of Innovation and Technology
Lawyers are under the constant pressure of justifying their existence in increments measured by minutes. Converting every minute into revenue is a law firm priority and the basis of compensation for most lawyers. The culture does not encourage lawyers to be part of a process of change.
Innovation in the legal profession is occurring—and not only in the area of technology. Law firms desiring a relevant existence in the present and in the future should be part of innovation and change rather than sitting on the sidelines or letting others achieve it.
Creating a culture of innovation requires an investment in innovation in terms of time and capital. Acknowledge and reward innovation. Make innovation a part of the conversation every day. Train leaders in innovation. Seek out lawyers and staff who can and will innovate. Create time and space for innovation to occur.
Consider Emerging Technology
Artificial intelligence, virtual reality, blockchain, and other technologies are evolving. Develop an understanding of these technologies and consider how the technologies can be implemented into your practice.
Consider providing a client portal for estate planning documents. Can you use blockchain to help clients deal with timelines in complex real estate transactions?
Can chat bots on your website reduce costs and facilitate client service for certain audiences? Some clients do not want to meet their lawyers face to face. What technologies make sense for you to connect with clients who do not want to travel to your office?
Collaborative technologies continue to evolve. These technologies allow participants to interact in virtual environments.
Offer Alternative Fees
The term “alternative fees” refers to a wide range of alternatives to pricing for legal services. There are numerous variations of alternative fees, and every law firm can design fees to suit its services and offerings in a way that enhances communication with clients and allows them to create profit centers that are not tied solely to an hourly rate.
Trust and estate lawyers often quote a flat fee that is perceived to reflect the cost for document preparation. The strategic mistake in this approach is that the preparation of documents is perceived as just “filling in names on a form.” The estate planning fee is best approached by breaking the fees down in a manner that reflects the process. The most important part of the estate planning process is intake, analysis, and recommendation. Quote a separate fee for this part of the process. Real estate lawyers can consider the various steps of a transaction and establish a fee for the various steps in the process. Alternative fees can include a combination of flat fees, hourly fees, and other fees.
Offer Online Services
As documents and processes are automated, clients turn to online services for legal documents. In many cases, law firms can offer similar pricing for services that are not available online.
Law firms should consider supplementing personal services with online legal services. Many clients want to be able to access services online. It is likely that your clients are already using online services for some purposes. Provide a competitive alternative that allows you to provide the same service with a little extra.
Engage in Process Automation
Work that is repeatable and predictable will get automated. A sustainable law firm will be ahead of the curve in identifying and automating these processes.
Firms should consider automating the processes that they engage in frequently. Start with those that generate lawyer revenue and have the potential to result in profitable alternative fee structures. Any process that enhances client service should also be an automation priority.
Automate Document Preparation
Some lawyers still start the process of creating a document by pulling up a document they created for another client. Such approach has a variety of problems. For example, “Find and Replace” rarely finds everything that needs to be replaced.
Another common problem with using a previous document is that it is likely that provisions were added and deleted. In drafting a document for a different situation, an added provision could get left in, or a deleted provision could be overlooked.
Using document assembly results in creation of customized documents quickly, efficiently, and accurately. Document automation will result in fewer hours to complete the same task. Document automation will result in a higher level of client satisfaction and an improved bottom line. For lawyers that are not interested in automating documents themselves, there are many excellent service providers available to do this.
Engage in Knowledge Management
Knowledge management is about capturing, distributing, and effectively using knowledge. Knowledge management can relate to the details of a particular job or job function or to substantive knowledge or to processes.
A simple form of knowledge management is creating tools that help people learn how to do their jobs. For example, creation of a checklist for the general estate planning process will facilitate bringing along a new lawyer or paralegal.
Another form of knowledge management relates to capturing and making available substantive information and forms. Attorneys often research unique issues and develop unique documents. A knowledge management system will capture research and documents in a way that permits other attorneys to find and use the research rather than starting over. If you are developing expertise for real estate used in relation to the marijuana industry, accumulate information and sample documents for ready use as issues arise.
Become a Master of Data
Law firms that master the use of data will be the law firms that survive and thrive. Data is the information that comes into a law firm or elsewhere every day. It is not the data itself that has value to law firms, but rather the analysis of such data, which can be used to determine patterns and trends.
There are multiple ways that law firms can utilize data. It is important for law firms to know the sources of incoming clients, the types of services being referred, and the profitability of different areas. It is fairly easy, and inexpensive, to use tools to track and provide useful reports of such data.
A firm that does a lot of estate planning might choose to track data reflecting the time consumption for different types of plans. Such data might help in pricing by creating the ability to compare the time required to prepare an estate plan for a single person to the time required to prepare an estate plan for a married couple with children from prior marriages and a current marriage.
Law firms can also track data regarding referrals of various types of projects. Such data can assist in identifying referral relationships that should be given further attention.
Develop a Culture That Values People at Different Life Stages
There is a lot of information available on millennials in the workforce—and considering the millennial approach to work is important. But there are also senior lawyers who have dedicated as many as 40 to 50 years to their law firms or the practice of law, as well as mid-career lawyers, to be considered.
A sustainable law firm knows that keeping legal talent on board is important. Keeping talent requires rethinking how lawyers are valued at different life stages. Shift the focus to lawyers as the people they are.
Many law firms are defined by their billable hour requirement. A 2,400 billable hour requirement for a young lawyer starting a family, a mid-career lawyer going through a divorce and caring for a parent, or a senior lawyer with expertise who would like to travel more can chase talent out of a law firm. The sustainable law firm will develop a culture and compensation systems that value lawyers who contribute differently at various life stages.
Create a Diverse Law Firm
Diversity means inclusion of individuals of different socioeconomic status, different races, different sexes, different religions, and different sexual orientations. Very few law firms have achieved real diversity yet. A diverse team is more likely to be innovative and creative. Diversity improves the bottom line.
Encourage Remote Lawyering and Consider Contract Hires
It is true that a law firm focusing on relationships requires people to be in the same space at times so they can get to know each other and build relationships. It is also true that a typical lawyer could come to work, go into his office for 10 hours, and barely talk to anyone.
Working remotely is not for everyone but has become more possible and is on the rise. For those struggling to find a great paralegal locally, hiring someone further away and allowing him to work remotely may be a solution. Remote employees reduce overhead. Remote opportunities increase the pool of available attorneys and staff.
A small firm may benefit from drawing on contract lawyers who are not interested in full-time positions. There are many talented lawyers who are willing to do occasional projects. Using such resources can keep firm overhead low while a firm is determining whether the work will grow into the need for a full-time hire.
Create a Culture of Wellness
Depression, addiction, and mental health issues are increasing in the legal profession. Physical health issues also abound.
Historically, law firms primarily have imposed billable hour demands on lawyers. Practicing law is a stressful occupation. Clients want perfection—yet they want lawyers to spend the least amount of time possible accomplishing that perfection. Lawyers constantly deal with time pressure and multiple client demands. And, they might even try to have a home life.
Law firms that develop a culture to support wellness will attract and retain talent. Well individuals are more productive than those who are not. A culture of wellness will result in more positivity in the law firm. Client service will improve, innovation will thrive, and retention will improve.
Lawyers will continue to exist and have valuable purposes as technological advances continue and societal perspectives shift. But what lawyers do and how they do it will change. Law firms that thrive in the future will be those that consider sustainability from a variety of perspectives.