A lot of ink has been spilled in the legal media over hot topics such as the creation of national firms, the introduction of multi-disciplinary practices (MDPs) and cross-border mergers. But perhaps the most significant trend in the 1990s was the evolution of law from a practice or profession to a business.
Traditionally, the key to success in private practice was to learn to practise excellent law. This meant staying current on legal developments, reading legal publications, honing drafting capabilities and perfecting lawyering and advocacy skills.
But businesspeople routinely observe that their main complaint with lawyers (both in-house counsel and lawyers in law firms) is that they too often slow things down. Trained to recognize liabilities and to protect their clients, lawyers tend to throw up caution flags when concerns arise and try stop matters there.
Lawyers have to know the law, but just as importantly, they must know and appreciate what drives the businesses they serve. They must learn how to help clients steer around potential hazards and find ways to make their ventures work. Litigators need to understand their clients' business objectives: early resolution, reduced legal costs, and so forth.
Successful and valuable lawyers and law firms will be those that conduct themselves first and foremost as business leaders, by adopting business strategies.
Out of the box
A lot of lawyers need to lose the label of protector. To do so, the lawyer has to choose a desired market positioning, and with it, an accompanying strategy.
For example, in today's legal services market, it's no longer enough for a firm to position itself as environmental law experts. Lawyers need to focus on what a particular client needs in an environmental law context. Both for law firms and in-house law departments, strategy and positioning should be chosen to support the client's business goals.
As another example, suppose a corporation wants to find a way to reduce its operating costs. A law firm seeking the company's business could position itself to offer cost-effective services by, say, streamlining the reporting process or using email to eliminate paper-related disbursements.
Focus on clients
Positioning and related strategic initiatives by lawyers and law departments must centre around a clear client focus and must respond to the client's needs.
For instance, a corporation might have a heavy volume of supplycontracts to administer. Its law department could develop a standard form contract for client departments to use themselves, and identify those situations in which direct legal assistance is still needed. Not only do the client departments obtain excellent legal service, but they also end up with a system that allows them to improve their efficiency.
Tell them about it
A law firm positioning itself in its market must ensure that it's communicating its intentions to the target market at every opportunity. This requires much more than just written advertising or internal corporate communications.
Successful law firms and law departments use every possible occasion to tell their clients what they intend to do for them and to communicate their results in a specific way. Lawyers can get this message out by, for example, scheduling regular check-up meetings with the clients or sitting in on their management meetings.
The hottest strategy for professional firms in Canada today is branding (see: "The leading brand," National, October 1999, p. 8). Brand recognition goes well beyond a simple advertising slogan. It's achieved through actions that demonstrate a firm's distinctive character and its commitment to its defined objectives.
Branding professional services is admittedly difficult. Perhaps only the major international consulting firms such as McKinsey, Ernst & Young and Price Waterhouse Coopers have so far succeeded in creating a strong image in the minds of potential clients. It will therefore be interesting to see, which law firms achieve brand recognition over the coming years.
Innovation
From the first day of law school, lawyer are trained to regard precedent as paramount. But their greatest obstacle to success in today's highly competitive market is an accompanying reluctance to do things differently.
Business leaders know when to abandon tradition for new and more profitable ways of operating; they know how to surf on the crest of the wave. Lawyers have to learn to do the same. Market share is gained by leaders, not followers. This means lawyers must be innovative and proactive. It's not enough to wait for clients to implement new processes, or demand new pricing alternatives. Lawyers must be a resource for their clients.
For example, most insurance companies don't have the data or resources to come up with alternative billing strategies. Law firms do. Lawyers can propose new retainer relationships, such as flat fee arrangements, that allow the insurer more certainty and predictability. That kind of proactive behaviour leaves a very favourable impression with clients.
Quality control
Manufacturers and suppliers know you can't leave quality control to the individual worker. Even most professional service sectors have set up well-developed peer review systems. But few law firms or law departments have done the same.
The rise of MDPs in Canada should serve as a wake-up call to the legal services industry. The highly effective peer review and quality control systems used by the major consulting firms could prove to be a significant competitive advantage for these firms in the new legal marketplace.
Technology
It's hardly news that technology is an integral part of business today. Yet many law firms and law departments haven't yet begun to fully realize the benefits technology has to offer.
It's become difficult to generate profits from certain types of commodity legal services, such as real estate and wills, by offering these services in the traditional manner. Offering these services over the Internet, however, is proving popular with clients who want quick, low-cost solutions.
More importantly, technology can be used to offer value. Law firms and departments can deliver services more cost-effectively if they reduce their reliance on support staff. Clients are unwilling to pay the costs associated with infrastructure, so lawyers must become more self-sufficient, perhaps with the help of templates and voice recognition software.
Nor should law firms and departments underestimate the benefits of investing in an Intranet. Giving clients easy, 24/7 access to the status of legal matters and to the cost of their legal services illustrates the truth of the adage "information is power."
Taking time out from a busy workload to focus on business objectives is critical. Waiting to feel the crunch could prove fatal.
Lori D. Brazier, LL.B., MBA is a partner with Catalyst Consulting, a national consulting firm that works exclusively with legal service providers and their clients. Lori can be reached at lbrazier@catalystlegal.com.