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Differentiating the modern small law firm and how cloud-based matter-management technology can help

Roxanne Selby

25 Jul 2017

In the increasingly competitive legal services market, everyone is talking about ‘differentiation’. Everyone wants to stand out from the competition. Price, quality, and service are key. Differentiation drives competitive advantage.

It is reductive to state that the result of differentiation is the holy grail of price premiums. Yet successful differentiation reduces the directness of competition. It changes the conversation from that of price competition to one about non-price factors. If clients value your offering, they will be less sensitive to competing offers.

So who is differentiated?

The market for small and medium-sized law firms is increasingly crowded. The sector also has an increasingly homogenous feel. Who can really tell one firm from another? Many firms claim unique market position, but how much of this is internal naval-gazing? Can the client – or potential client – really tell one firm from the next? And do they care? Some factors held out as differentiation – sectoral specialism, timely delivery – are yawn-inducing, nothing but hygiene factors expected by the busy client. Certainly, me-too approaches proliferate. For very small firms, or sole practitioners, you yourself are key: people instruct the firm because of you.

How can you differentiate your firm?

There are many ways in which you can differentiate your firm to enhance its attractiveness to your potential target market. Look at the market context. What are your unique resources that can develop a position uniquely valuable to your client base? What skills and networks do your employees bring? Are you offering a product that differs from that of your competitors? Or delivering it in a new and exciting way? Or providing unrivalled availability? Only after identifying this, is it possible to use sales and marketing to carve out a unique identity.

Technology as a source of differentiation

However you look to position your firm, responsiveness and understanding of your clients’ businesses are overwhelmingly the key factors determining which firms are instructed. (See Standing out from the crowd: What businesses value most from their law firms). So any differentiation strategy has to ensure that these factors are covered.

I recently participated with Sally Azarmi, of Azarmi Legal Services and Head of the Law Society Small Firms Division, in our webinar on how cloud-based matter management can help set small firms apart and deliver enhanced client service. A key theme of this webinar was the importance of technology to standing out. Technology is central to maximising fee earners’ time. For small firms, based on their founders’ reputation, this is critical. Fee-earners do not have the time to wear the multiple hats of IT manager, fee earner, and trouble shooter. Simple cloud-based systems free up crucial time and space. Further, this  technology can also enable a small firm to create the highly professional, cutting-edge impression of a firm that is larger and more established, giving clients the confidence to give them high value work that might otherwise go to much larger organisations.

So technology is increasingly becoming a factor in generating differentiation and competitive advantage. It supports core business processes, acting as a time saving device freeing up fee earners to serve clients better, to focus on the all-important relationships and on providing the personal touch. Matter management solutions such as Firm Central can save each fee earners 15 minutes or more a day, freeing up valuable time to focus on the value add, or on networking and business development. It can also be accessed anywhere, increasingly important in the current age where a fee-earner may be as likely to be at home as in the office.

Technology is not just a supporting tool but can itself differentiate

Technology can also place you ahead of peers. Cloud-based solutions, such as Firm Central, enable you to have access to big firm technology and infrastructure in a way designed for the needs and workflow of small firms, without the hassle of IT infrastructure, servers, backups, and IT staff costs.

And to present modern, client-friendly, collaborative services that exude professionalism. Imagine visiting the offices of a law firm. Is the office awash with paper or the modern digital workplace more impressive? Which would you want to instruct?

Likewise, would you prefer to instruct the firm you have to ring up for updates on your matter, or the one providing real time 24/7 updates, and using collaborative tools such as client portals to work with you to achieve your desired result. Technology such as Firm Central enables firms to differentiate through their improved service offering.

In the recent webinar mentioned above, we discussed this and more, with Sally Azarmi, Chair of Small Firms Division at the Law Society of England and Wales. You can access the full recording of the webinar and the presentation here.

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