Today, law firms face competitive
pressures that they’ve never before
encountered—a unique set of
challenges that present problems to
many and opportunities to the truly
innovative and enterprising. In this
paper, we share ways to differentiate yourself from the crowd, serve clients better, build better business,
and truly prosper in these challenging times.
Fortunately, the recession is behind us—but the lessons learned by clients during those times persist.
Driven by necessity during the downward economic shift, clients became very knowledgeable (and
inventive) in finding ways to drive down fees they pay to law firms. This has taken many firms by surprise,
and they continue to struggle to adapt to the new reality. For many, the downward pressure on fees goes
straight to the bottom line—hitting profits and, of course, partner distributions as well.
To compound the problem, law firms face new kinds of competitors. Some of these competitors are
technology companies who have developed ways to deliver traditional transactional legal services in an
automated or semi-automated fashion. In the semi-automated case, in-house counsel can often "fill the
gaps" themselves, heavily reducing or eliminating the need for the help of outside law firms. In other
situations, a new kind of competitor made up of a mixture of components—technology, small in-house
legal resources and/or offshore teams—has emerged.
To the enterprising—those willing to adapt, respond and innovate—what are seen as challenges to
others present great opportunities; a chance to find new clients, deepen existing client penetration,
and differentiate their services from those of others.
© Copyright 2013 Elegrity, Inc. All rights reserved.
W HEN W E TALK ABOUT LAW FIRM DIFFERENTIATION AND INNOVATION, W E’RE
NOT TALKING ABOUT THE EQUIVALENT OF INVENTING THE IPHONE—W E’RE
TALKING ABOUT EMBARKING ON AN ACHIEVABLE PATH THAT W ILL SET YOU
APART FROM THE COMPETITION AND GAIN THE ATTENTION OF BOTH CURRENT
AND FUTURE CLIENTS.
But before we talk about that, let’s first review the
But, in spite of these changes and pressures on law
pressures law firms are facing:
firms, it is possible to survive, grow and prosper. Let’s
1. Clients are more knowledgeable and negotiate
look at how this can be achieved.
aggressively, seeking alternatives to the traditional
fee-based structure or simply lower hourly rates—
Transient Differentiation
the most common Alternative Fee Arrangement.
In the previous section we spoke of how law firm
This threatens both revenue and overall profitability.
differentiators are being copied and eroded with
2. Many clients have moved from hiring a single firm
standardized services, driving down fees. This is
to represent them to selecting a number of law
known as “transient differentiation”—a situation where
firms—forming their own "teams of rivals". Clients
your practice’s unique advantages and differentiators
are effectively “cherry picking” the most experienced
are increasingly short lived. By taking the following
individuals from a number of law firms rather than
four steps your firm can take advantage of its unique
engaging with just one firm.
differentiators while they exist, and thereby enhance
3. Procurement selection is increasingly common.
your market position:
1. Understand your current service innovations and
Rather than a client-partner relationship and
engagement, law firms are now commonly
differentiators. This could be anything from partners’
subjected to a request-for-proposal process
skills and experience to the unique way you conduct
(RFPs), often with a corporate purchasing
business, your geographic coverage, and the one-
department leading the charge.
of-a-kind service you provide.
4. Widespread adoption of technology has meant
2. Accept that the advantages you have today are
transient and short lived.
that legal services can be delivered from low-cost
geographies, eroding margins in the domestic
3. Capitalize on your advantages today—to the fullest
market. The “outsourced” model is quickly
possible extent—especially in the areas of business
becoming a preferred model for many clients,
development and new client acquisition activities.
leading to cost cutting and commoditization
4. Plan a new position of differentiation based on
of services.
current market forces and client needs and preferences.
5. Law firms' uniqueness—the way they differentiate
themselves in the market—is being eroded much
faster than in the past. This is, in part, fueled by
a more competitive market and the advance of
technology. Once more, this is leading to the
standardization of services and the drive to
lower fees.
6. Firms now have to compete on a far more granular
level. To win business they are expected to show
specialties in well-defined areas including industry
Within your firm, you have a number of existing
and potential advantages—do you know what
they are today? Will you know when a new one
emerges? The goal is to identify them, act on
them, and build the foundation for the next
generation of service innovations. That’s the
key to differentiation and the hedge against
commoditization of services. We’ll be exploring
ways of doing this later.
experience, geographic coverage and a host of
other piecemeal service areas.
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Shifting Your Focus to Achieve Strategic Goals
1. Move from Branding to Concentrated Marketing
3. Move from Contacts to Touch Points
While branding will continue to be an important activity,
For years, law firms have developed lists of client
it’s no longer all you need to do to grow business.
contacts, tracking and managing them through Client
Taking your differentiators—your service innovations—
Relationship Management systems (CRM). While this
and matching them to the specific needs of your clients
is still important, you need to shift to a more flexible
will help people understand what you do and how you
and personalized “touch point” system where each
do it in a way that’s different from others.
meaningful client and prospect touch is recorded
Your marketing message will then shift from general
and tracked.
practice statements to opportunity-specific value
This will enable your firm to engage with clients and
propositions that reflect your unique service offerings
prospects on a deeper, enterprise-based level bringing
and differentiators.
more value, insight and knowledge to each engagement.
2. Move from Practice Groups to Opportunities
4. Move from Client “Ownership” to Meaningful
Client "Engagement"
Here we see teams assembled for a targeted
opportunity. The teams are agile and flexible. Team
Traditionally, clients have been managed by an
members are selected based on the needs of the
attorney. This is shifting to a situation where a client
specific opportunity. The team can react quickly to
relationship manager engages deeply with each client
information it has on the opportunity, and tailor its
to establish an ongoing and continuous business
activities based on the need of the potential client.
relationship. Of course, this may still be an attorney,
This is a departure from the traditional partner-
but in a new role.
client relationship.
Selling more services to existing clients is far easier
and more cost-effective than finding new clients, so
the client relationship manager invests time seeking
opportunities with existing clients. To do this, the
client relationship manager needs to develop a deep
appreciation of the needs of the client—and then tailor
the services offered accordingly.
Firms that “embed” themselves in client organizations
are often the first to come up with new service offerings
and the next generation of innovation and market
differentiators. They are also well placed to take
advantage of cross selling (selling into new departments)
and upselling (selling more and different types of
services). Just as importantly, they are much less likely
to be "cut" by in-house counsel.
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Making the Strategic Shift Needed – Three Key Factors
As mentioned at the beginning of this paper, making the transition towards a truly innovative law firm and reversing
the trend of commoditized services need not be a Herculean task. Increasing your firm’s effectiveness, improving
internal processes, the service you provide, enhancing business development, and raising practice profitability can
be achieved in the follow ways:
1. Cradle to Grave® Process Management
that equips you to offer the most relevant services to
potential clients.
®
Cradle to Grave is a completely integrated and
closed-loop process designed to improve efficiencies
Having better information on the entities you’re
through all stages of the client and matter lifecycle.
serving—those you’re selling to, and on potential
®
opportunities you might be missing—puts you on
Cradle to Grave BPM includes:
-
Deploying business processes to improve existing
efficiencies and protect profitability.
the path to profitable business expansion.
Also, enterprise-wide information provides accurate
-
Risk management and loss protection.
feedback on your existing differentiators and
-
Information “shepherding” from both internal
business systems and external information
sources to gain 360-degree corporate intelligence.
establishes the foundation for launching new
Making real-time agile shifts in response to
changing business conditions and maintaining a
lead in service innovation.
differentiators discussed earlier. Enterprise-wide
-
innovations. This helps maintain a unique position in
the marketplace in the face of the rapidly eroding
client and prospect intelligence would include:
-
Financial and market data.
Most law firms are organized along the lines of functional
-
Corporate background.
activities and these tend to be siloed—rarely sharing
-
Existing touch points, prospecting and
past experiences.
makes it difficult to attain a cross-functional view of the
-
Information on internal processes and events.
organization or get a complete view of the client.
-
Corporate make-up of the organization and
its affiliates.
information or efforts across departmental lines. This
A far better approach is to break down these siloed
functions, combine data gathering activities, and
As you can now see, this takes you beyond the realm
organize information into real and useful organizational
of standard CRM and provides a truly competitive
knowledge. By eliminating the siloed stores of data and
advantage in the market place.
organizing information in a way that’s of value to the
whole firm, you start to get a better view of the market
3. Naturally “Fed” Knowledge
®
and of your clients. This is an essential step to
With the Cradle to Grave approach in place,
providing higher service levels and offering innovation
information no longer has to be searched for or reports
and differentiated services.
manually compiled. Relevant information is delivered
2. Corporate Intelligence
as and when needed. Access to corporate intelligence
becomes an integral part of your business development
To better serve existing clients, and be in a position
strategy and client support activities. Information is
to find new business, it’s essential to have the most
delivered in the context of the activity you’re performing
accurate view of the clients and the enterprises where
and at the time it’s needed. Information becomes an
they work. For business development, having
integral part of the business development process—
information on the complete enterprise puts you in a
because it’s an integral part of the way your business
position to sell more services to existing clients and
is operating.
find new opportunities within the enterprise. It’s an
information-based approach to business development
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Opportunity Profiling: Putting the Power
of Real Intelligence in Your Hands
Changing Roles of Marketing and
Business Development in Law Firms
Having readily-available and relevant information at
One of the key things we’ve learned over the years is
your fingertips is a powerful business development tool.
not to start with the solution you want to offer—or the
It makes you more agile in responding to the market
ways solutions are taken to market—but to listen to the
and more informed when engaging with future clients.
important questions that clients ask. This gives insight
We refer to this as “opportunity profiling”—the process
of deeply understanding the needs of your client and
into the issues and challenges they face, and the things
that are of prime importance to them.
matching your firm’s skills and experience in a specific
Understanding key client questions and needs drives
and granular manner. This enables you to:
service innovations that differentiate you. In building a
long-lasting cycle of innovation, you need to first look
-
Identify new opportunities more clearly.
-
Design concentrated and highly relevant marketing
programs.
-
Understand previous engagements with this client
or enterprise.
-
Find the most experienced and relevant people in
your organization and understand how they can
help in the business-development process or
execute the work the most profitably.
-
-
into your own law firm to understand the assets and
differentiators you currently have, then understand how
you can answer the questions that trouble clients. From
this comes a cycle of innovation that leads to longlasting differentiation in the market.
®
Cradle to Grave BPM supports and extends this
innovation process by demonstrating ways of applying
law firm innovations to client situations—while also
Discover how and where you have deployed
unique differentiators in the past.
driving internal innovation with process efficiencies,
Gain insight to the kinds of service innovations that
could prove advantageous for the enterprise.
reductions—all the tools needed to prosper in
information sharing, risk management and cost
challenging times.
Effective opportunity profiling is based on effectively
leveraging the information that exists today (both
internal and external information) and using process
management to drive this information to the place it’s
needed—presenting it in meaningful ways that can
Now, let us show you how, let’s have
a brief call—we’d love to hear what
questions you are trying to answer…
clearly demonstrate your value proposition.
Elegrity, Inc.
160 Pine Street
Suite 720
San Francisco, CA 94111
Tel: 415-821-0900
Fax: 415-826-7758
www.elegrity.com
www.blogs.elegrity.com
[email protected]
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www.elegrity.com
1.415.821.0900
[email protected]