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Law firm management

A balancing act: Managing more for less

Solo and small law attorneys are acutely aware of the many tasks it takes to run a firm to remain competitive today. As the landscape continues to change, attorneys are faced with the paradoxical notion that clients want more for less, but firms feel the pressure of needing more to differentiate themselves from their competition. That raises the big question: Where is the balance?

In 2016, Thomson Reuters Small Law and FindLaw® businesses conducted two studies. The US Small Law Firms survey looked at how firms operate today, how they’re trying to grow and the challenges they face in doing so. The 2016 US Legal Consumer Needs survey gathered information on the different legal issues among online consumers and the actions they took in response. Together, the results shine a spotlight on just how deeply firms are feeling pressured.

Small Law Managing Director Karl Florida had a conversation with FindLaw Senior Director of Strategic Development Mark Jacobsen and Vice President of Small Law Customer Marketing Brian Knudsen to get their thoughts on the main challenges lawyers at smaller firms face today and how Thomson Reuters can help relieve the pressure.

Karl Florida: In the Small Law survey, you asked participants to define “success” as it relates to their firms. What do the top three definitions tell us about the industry today?

Brian Knudsen: Client satisfaction ratings, repeat business, overall profits – this is a customer service industry and these top three definitions of success prove that. It’s not as simple as winning or losing cases anymore. When more than 85 percent of firms say they see success as clients being happy, it’s also about delivering responsive customer service and building trust. Then, it’s about pricing services accordingly to remain profitable.

Florida: But it seems as though firms are struggling with the idea that they need to be more business-centric and really embrace entrepreneurship. So from the customer service perspective, what do legal consumers really want?

Mark Jacobsen: Often, a consumer simply wants general information about his or her legal issue or even guidelines on the steps to take if they do end up needing legal representation. And where are people going nowadays for information? We learned that about 70 percent of consumers are getting it online. While they may still get a referral from a family member or friend, they’re searching Google, looking at a firm’s website and browsing social media. The first step firms need to take is creating a presence online so consumers can find them. After that, when it comes to the top three factors in making a decision to hire an attorney, 22 percent of people cared first about expertise, 16 percent relied on recommendations and 10 percent strongly considered costs.

Florida: OK, creating an online presence so they can be found. That seems perfectly reasonable. Why aren’t firms meeting that demand?

Knudsen: It boils down to time. While larger firms are concerned about realization rates and practice optimization, smaller firms are struggling with wearing the many hats it takes to run a business: the marketer, the administrator, the accounts payable roles all fall to a few people – and that’s all before they can even get to actually practicing law.

Jacobsen: Small firms are also finding it challenging to keep up with marketing trends. If you’re spending roughly only six percent of your time on marketing your firm, as we found many are, it’s tough to stay ahead of how fast the online world moves. So, not only are these firms having to figure out how to do it all in their business, they’re also having to keep up with the racetrack pace of the Internet. Websites, social media, integrated marketing, online advertising – there’s a reason bigger companies have specialists for these areas, but that’s not a luxury small firms can afford.

Florida: Another trend I noticed in both surveys is concern for cost of services. Even though they’re playing the jack-of-all-trades role in their businesses, nearly one-third of lawyers say they are significantly feeling pressure to reduce costs to remain competitive. And we saw an 11 percent increase from 2015 of consumers looking at DIY routes to save money. It sounds as though firms don’t understand how to communicate their value to clients. So, it’s coming down to dollars and cents instead of services rendered.

Jacobsen: Right, or even if the firm does know its value and how they differentiate from the competition down the street, the firm may be broadcasting it in the wrong place. Billboards, radio commercials and the Yellow Pages were once used as the primary advertising tactics. But we’re continuing to see trends marginalize these traditional channels because, as mentioned before, consumers are going online to research information. And when we’re talking impact, 63 percent of consumers consider online reviews to be important when selecting an attorney. Law firms can start showing their value by having clients write about their own experiences working with the firm so that other consumers can relate.

Knudsen: To piggyback off of that, the Small Law report showed that the top goals and priorities for firms all have one thing in common: reputation. Lawyers want their local community to know who they are, and they want to be seen as the best of the best. By learning to articulate their own value and present it in the right places with the right audience, they are positioning themselves for what they deem as success.

Florida: So being seen positively in their communities, cutting costs, creating happy clients, etc. It seems firms clearly have their goals defined. But what are they doing to reach them?

Knudsen: We learned that only one-third of firms are addressing the top challenges that may impede their success, which is understandable. We know it takes time and resources, which are in limited supply for small law firms. And many challenges don’t inflict enough immediate pain to marshal action. But the point is clear: Firms that change today will be better positioned ahead of their competition tomorrow.

Florida: We’ve talked a lot about pressure, and that’s not a new concept to anyone in the working world. But I think we need to acknowledge that it’s particularly noteworthy with lawyers because as the legal industry has greatly expanded over the years, the demands to change with it have magnified. There is no one fix-it button.

Knudsen: Exactly. Solo and small firms specifically are feeling the growing pains tenfold. So, the question we ask ourselves is, where does Thomson Reuters fit into all of this? And how do we help attorneys address these very real issues that clients want more for less but now small law firms need more resources to compete?

Jacobsen: I also think we continue watching the legal landscape for changes to ensure we remain a go-to source of information for our own clients. We help them identify and address their greatest pain points today and anticipate what they’re likely to face tomorrow so our offerings continue to deliver results in a dynamic environment.

Florida: I agree with both of you. The two surveys reinforce that it’s becoming more complex and harder for these firms to succeed. The value we can continue to provide is being that leading partner and trusted advisor to help smaller firms be successful at balancing the challenges they face today: growing a business, practicing law and managing a firm. Our job is simply to make it easier for them to succeed.

Meet the interviewees

Karl Florida, Managing Director of Small Law Firm and Consumer at Thomson ReutersKarl Florida joined Thomson Reuters in 2005 and is currently the managing director of Small Law Firm and Consumer for Thomson Reuters, Legal. The Small Law Firm business provides information, software and services to help small law firms practice more effectively, manage more efficiently and grow faster.
Vice President of Small Law Consumer MarketingBrian Knudsen, vice president of Small Law Customer Marketing, is a licensed attorney responsible for delivering legal software, information and solutions to small law firms. He has been with Thomson Reuters for more than 20 years, holding various positions in the legal editorial, product development and customer segment leadership.
Mark Jacobsen, Senior Director of Thomson Reuters FindLaw Strategic DevelopmentMark Jacobsen is the senior director of Thomson Reuters FindLaw Strategic Development and leads a team focused on the early-stage development of products, services and capabilities to help law firms generate new business opportunities and grow the quality and quantity of their clients. Jacobsen is a regular speaker at industry conferences on such topics as digital marketing strategy, search, Web development, project management, online learning and interactive multimedia applications.

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Were there any surprises in these findings compared to your firm’s experience? Let us know in the comments below.

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