The challenging future legal and business environment which is widely anticipated will demand a lot more from law firms than providing quality legal advice. This is the view of Ian Robertson, long-standing managing partner of Holding Redlich’s Sydney office, writing in The Australian (apologies; link requires subscription or log-in) recently.
This advice backs up on the findings of a recent survey of Australian managing partners and chief executive officers indicating tighter times ahead – with recruitment levels and profit margins expected to be down over the next five years based on deteriorating business confidence.
For Australasian law firms the writing is on the wall for some or more of the following:
- Better service at lower fees: this is simply because clients have more choices, are more canny and have realised it is increasingly a buyer’s market. Even more challenging is that given market conditions this will be coupled with fewer and smaller transactions and disputes. The only possible exceptions will be in resource–rich states such as Western Australia.
- Fee estimates, fee capping and fixed fees will be the order of the day: on top of this clients will look for real value and will carefully analyse all charges to ensure they are justified.
- Quantitative leverage will be rejected: clients will accept leverage, but only qualitative leverage, in the sense of high calibre, suitable staffing on a team where work is pushed down to the lowest (highly)competent level and charge-out rate.
- Accurate scoping and budgeting of work an essential skill: other professionals have been doing this for decades. While some law firms do this it will be a challenge for others.
- Industry sector knowledge an essential: over and above legal expertise, which is assumed, clients will seek lawyers with specialist industry sector knowledge. Those who can develop or have an intimate knowledge of their client industry sectors and can build personal brands and thought leadership around this, will thrive.
- With an eye to the future, attracting and retaining truly top calibre talent: undoubtedly, top-quality law graduates can still pick and choose where they work. These graduates want firms with a proven track record of not only providing exciting and challenging work but also creating a positive environment and professional experience with a genuine personal and professional interest taken in them.
- Finding the balance between the profit drive and creating a harmonious workplace for staff and partners: with all the other challenges facing firms, this is a tough one to address. It is all about balancing the firm’s business requirements, its values and cultural attributes in a way which has true meaning for partners and staff.
- Taking advantage of existing and emerging technologies: this is particularly important to support flexible working arrangements and virtual working. Many proven technologies are available and those firms that take advantage of these can ensure high calibre partners and staff who are otherwise unable to work full-time, can still contribute handsomely to the firm.
Early in 2012 is the ideal time to consider these and related challenges. One of the first things that should be revisited, reviewed and updated is vision and strategy and delivering on this. Not only is it going to be important for firms to think carefully about which of these items feature in their brand offering to thereby build differentiation, firms will also need to ensure that these are consistently experienced in the market.
I would welcome your comments on other challenges you foresee in your particular market/s.