Professional services firms enjoy unique competitive advantages over other types of businesses – yet at the same time have particular challenges in how they must execute their growth strategies. In one way their services are, by nature, intangible. In another, they offer ‘products’ that are essential to the functionality of their clients’ businesses.
The most growth-centric professional services firms operate in response to what clients are really buying: trust (reliance and assurance), intelligence (specialized information and knowledge), and customized expertise (contextual experience and perspective). These assets are the currency of value creation for professional services firms. To effectively sell them requires highly-sophisticated strategies that leverage a nuanced mix of integrity, credibility and results.
Evolution of the Law Firm Business Model
The legal profession is restructuring its traditional business model in response to a dramatic shift in how clients orientate to legal issues in the broad mix of their strategic business imperatives.
At no time in recent history has there been a greater opportunity for ambitious law firms to think and act differently to better ensure a durable market leadership position in the volatile and uncertain context of “now”.
Top-tier international firms will continue to lead in complex transactions and litigation, multi-jurisdictional assignments and specialized regulatory work. However, mid-size firms committed to sharpening their differentials and to marketing proactively, may now go further upstream to win as a niche alternative.
Legal services are becoming commoditized prompted, in part, by hyper efficiency. At the same time, a good deal of the profession remains held back by old-fashioned, large private partnerships that resist change. That’s the opposite direction to where clients are heading.
Senior partners charged with growing revenue often find having to constantly shift between trusted advisor or counsel and legal strategist to business planner and relationship developer awkward at best.
Lawyers are specialized practitioners who naturally gravitate to the absolutes of technical detail and transactional engineering. They are not expected to be as equipped for managing the contradictory and often emotional dynamics of competitive business building. That context is, in fact, the antithesis of the mastery required for the domain in which they are often sought out by clients in the first place!
The traditional persona of the successful legal mind is what has historically framed the law firm business model – until now. The hyper-competitiveness of today’s virtually-driven landscape is precipitating a collapse of the big law ivory tower. Legacy practices are struggling to reinvent themselves and maintain their revered brands with value propositions that are less competitively viable and even economically indefensible.
Firms that are clinging to outdated models are experiencing wide fluctuations in new business activity because they are resisting the adaptation of new approaches in how they go-to-market and deliver services. As a result, they are risking business continuity by exposing themselves to unmanageable waves of upheaval and inconsistency – which drains resources and promotes the missing of opportunity. Furthermore, their turf is being usurped by younger generations who tend toward an entrepreneurial orientation of their profession that is far less hierarchical, technologically savvy, innately agile and fluidly opportunistic.
The Changing Dynamics of Client Decision-Making
Law firms are expected to interact more in the everyday operating trenches of their clients, making a contribution in the mix of the issues portfolio – whether it involves risk management, finance and accounting or business development, operations and supply chain.
Clients are demanding more transparency around costs and more assurance that they are acquiring the right expertise. Ever more resourceful, they expect high quality, cost efficient, value-added legal advice informed from a deep understanding of their business and context.
Growth-centric attorneys also recognize that they must position themselves similar to how other resource partners have done for years – interacting within a team as part of the client’s re-orientated circle of influence and decision-making. By assimilating principles of expectation, predictability and accountability into their delivery models, they will be well positioned to support clients in how they are increasingly managing their businesses: holistically, with end-to-end visibility across the enterprise.
Delivering legal guidance can no longer be a singular, linear endeavor. It must be a collaborative and integrated interaction within a team of compatible resource providers. Law firm go-to-market and growth strategies now need to reflect these shifts and become a seamless extension of the industry or sector universe in which their clients operate. AS