How law firms can stay competitive
The newly released 2019 Legal Trends Report is now available. Just like the previous years, the 2019 Legal Trends Report is a gold mine for law firms that want to thrive in this highly-competitive industry.
This fourth edition has been expanded in terms of the scope of research to include the most penitent issues relevant to lawyers and their clients. The research looked at what drives success in law firms, what clients look for before hiring a lawyer, and what it is like to shop for a lawyer in 2019.
Clio gathered data from tens of thousands of law firms and legal professionals in the United States. A total of 2,507 legal professionals and 2,000 consumers were surveyed. The sample was representative across all geographical regions, genders, and adult age.
To assess the quality and service responsiveness, another set of data was obtained by emailing a random sample of 1,000 law firms and calling 500 of these firms. All law practice areas had equal representation – Employment, Business Formation, Bankruptcy, Criminal, and Family Law.
Here are the key takeaways from the 2019 Legal Trends Report:
The Law Firm’s Growth
If you want your law firm to grow, then you would strive to learn how thriving law firms manage to increase their revenue over time. There are critical inputs these firms apply to their businesses that contribute to their exceptional growth.
Is revenue an indicator of growth? Up to 71% of lawyers believe that revenue is correlated with growth. Apart from being a quantitative and objective measure for success, it is also a standard benchmark for the health of a business.
Between 2013 and 2017, thriving firms grew their revenue by between 20 – 30%, achieving an average growth rate of 112%. In the same period, shrinking firms saw the revenue drop by 54% while stable firms maintained their level of revenue.
From the research, it was realized that growing firms increased the number of clients and cases they handled by a larger proportion than they increased the number of new lawyers they brought on board. The number of cases increased by 57% while the number of new lawyers increased by only 32%.
Shrinking firms decreased the number of cases and the number of lawyers by 40% and 17% respectively. This resulted in a 54% drop in revenues.
What this means is that to be successful, your firm should concentrate more on increasing the number of cases and clients.
Clients Need More Than Just Referrals
How do clients choose one lawyer over the other? To answer this question, Clio interviewed 2,000 consumers and the results of the exercise were interesting.
Even though many clients still rely on referrals to hire new lawyers, a good number of clients prefer to do the search on their own or use other means to get lawyers they need.
59% of the respondents said they rely on referrals, especially from someone they know. 57% of those interviewed said they search on their own, while 16% used referrals and also searched on their own.
The methods used to find lawyers include:
- Referral from a friend or family member
- Lawyer’s website
- Referral from a non-legal professional
- Online reviews
- Online map service or app
- Online search engine
- Phone book
- Lawyer blogs, articles, videos
- Lawyer directory
- Social Media
- Advertisement
- Referral from a lawyer
From these findings, you can see that if you only focus on referrals to build your business then you miss out on several business opportunities.
More Than 50 Percent of Clients Shop Around
Are you aware that before a client settles on your firm, they most likely have shopped around? 44% of clients do shop around before they settle on a particular firm, and 57% percent of those who have chosen a firm also confess they shopped around before doing so.
What does this mean for you as a lawyer? It means you stand a better chance of winning a client if you offer an outstanding client experience. First impressions matter as this will stop them from looking further.
That initial conversation you have with a potential client marks the beginning of a long journey together. If you don’t make the good use of that opportunity, the client may not come back. 42% of consumers say they won’t need to shop around if they liked the first lawyer they spoke with.
How Prepared Are You to Drive Your Law Firm’s Success?
Every law firm desires to grow, and when it comes to growth, most lawyers rank client base and revenue as the top two. However, 68% of lawyers say they aren’t appreciated while 76% say they are overworked. Those figures are very high and they might be contributing to the stagnation of your firm.
The research also found that 50% of lawyer’s lack confidence when it comes to managing their firms. If you are in this category, then you need to work on your level of confidence.
Apart from your confidence level, there are two other issues you need to look at when you want your firm to succeed. First, you must deliver a quality customer experience. In fact, this one should be your number one priority. If anything, your firm can never exist in the absence of clients.
Secondly, you must ensure the firm is organized so that everything gets done efficiently. This is not just about the systems you put in place but it also covers taking care of the interest of your lawyers, so they don’t feel under appreciated or overworked.
The best way to ensure your firm’s operations is running smoothly is to use tools that can help you to track time, accounting, clients and cases. Automating processes where possible will also help to achieve success. Find out why Lawyers love LawBillity to improve productivity and profitability try it free for 14-days (no credit card required).
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