Can small firms thrive in a tough competitive environment?
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With large firms on one side and legal service providers on the other, the new reality for many small firms is that they face a difficult competitive landscape. But they also have an opportunity to distinguish themselves from their competition if they embrace technology and seize upon their natural advantages over legal service providers.
During a Thursday afternoon session at ABA Techshow, John Stewart of Rossway Swan Tierney Barry Lacey & Oliver and Mary Vandenack of Vandenack Williams listed several ways that small firms can get ahead of the curve. By focusing on knowledge management, document automation, creating online tools for clients and utilizing alternative fees, Stewart and Vandenack maintained that small firms can survive and even thrive.
“Lawyers must adopt a new mindset,” Stewart said. “Think, not just like a lawyer, but like a consumer.”
Vandenack noticed many of her clients were flocking to do-it-yourself online service providers. Rather than give up on this low-end, commoditized work, Vandenack leveraged her experience in order to compete.
“To keep clients, I have to compete with the likes of LegalZoom and Rocket Lawyer,” said Vandenack, who formed a business formation practice at her firm. “But I don’t compete by offering documents. I distinguish myself with personal service, like making a phone call. And I have a clearly defined process for the particular service to be delivered online.”
Stewart also encouraged small firms to co-opt some of the features that distinguish legal service providers. “Lawyers can learn from tech companies,” he said. “Take document automation: There’s no reason why lawyers can’t use that in their own firms.” Stewart also noted that clients like receiving documents and argued that building client portals online is a superior and more secure way of sharing documents compared to email.
Both Stewart and Vandenack suggested that small-firm lawyers move to alternative fee arrangements. For one thing, AFAs tie into knowledge management because they force lawyers to have their processes down pat, as well as to know what their effective hourly rates truly are so that they can quote an accurate fee.
“I quote a fee range, but if we go over, the rate goes down,” said Vandenack. “If that happens, then it’s partly our error and we need to learn to be more efficient.” She also said she gives a potential client a two- to three-page analysis, including flowcharts and explanations of the firm’s processes.
Small-firm lawyers should also know that clients, especially millennials and younger people, are looking for legal services online, so it’s important to have a robust online presence.
“Before your client comes to see you, they Google you,” said Stewart. “So Google yourself if you haven’t done so recently.”