The strategic decisions law firms need to make in the current economic climate

Well before the current credit crunch, 36% of managing partners responding to a CLT survey said that Marketing and Practice Development was the number one priority - ahead of financial management, technology developments, HR activity and general management. Even in the current downturn, a recent '08 survey by Inpractice, showed that nearly 40% of senior managers in law firms surveyed said that “client relationship management” was their top priority. This was followed closely by “developing new business strategies” at 38% - and “people performance management” at 36%.

During the current economic crisis, financial pressure has been mounting and understandably some lawyers have been paralysed by fear of the making the wrong decision. However, firms that want to produce better results in order to survive and capitalise on opportunities need to be proactive in making business development decisions.

The decisions law firms need to be taking include:

• Whether or not to drop lower margin work and focus on higher margin work?


• Whether to join referral networks and how much time to commit to them?


• Whether to merge - for image, service offering and scale of operations?


• How to respond to clients whose needs and perceptions are changing; where corporate clients have more in-house legal expertise and individuals have more access to free information? They all demand a higher quality of service, are less loyal and demand value for money and expect lower prices.


• How best to capitalise on the new purchasing generation - the c14m 16-34 year olds – legal websites will be the first point of call for half of those who will purchase a legal service over the next five years.


• Whether and how - or in which areas - to compete with a new generation of competitors from retail and financial institutions; and other traditional law firms who are already changing how they do business.


• Who should be undertaking business development and management roles? We should now take it as read that no partner can be too busy for business development. Networking (in all its guises), for example, should be regarded as a routine part of work as a lawyer. How do we equip our people with the opportunities, understanding and skills to make the most of every opportunity?


• How to focus on client satisfaction? A common understanding that disgruntled clients disappointed by poor performance, attitude or communication who don’t come back will inevitably tell a lot of other people (who will go elsewhere) and will take a long time, money, resource and effort to replace.

Bill Kirby is a director of Inpractice UK Ltd. The company specialises supporting law firms and accountancy practices with business, marketing, CRM and IT strategies, HR, Quality systems, IT troubleshooting and business continuity. He can be contacted at bkirby@inpractice.co.uk