After reviewing the “2015 Law Firms in Transition” survey by Altman Weil this weekend, I decided to post some thoughts about what the results mean for lawyers in private practice because the revelations are really surprising.
The survey garnered responses from 320 managing partners and chairpersons at law firms of 50 or more lawyers around the country (more than 2/3 of responses coming from firms of less than 250 lawyers) and it delved into a number of subjects, but most interesting to me was the subject of new sources of competition.
Law firm leaders in the survey revealed that they are definitely facing greater competition from traditional and non-traditional sources, weighing in on the subject as follows:
- 83 percent of leaders stated that non-traditional competition is part of a permanent change in the market;
- 67 percent perceived that they are losing business to corporate in-house providers (presumably in-house counsel, risk managers, compliance departments, etc.);
- 24 percent perceived that they are losing work from shifts to technological solutions (presumably e-discovery providers, automated legal search solutions, etc.);
- 17 percent perceived that they are losing legal or quasi-legal business to non-law firm providers, such as accounting firms or specialty firms; and
- 9 percent perceived that they are losing work that is being delegated to new kinds of legal providers (such as temporary in-house counsel and the like).
Incredibly, fewer than half of respondents indicated with respect to any single form of competition that it was a “potential threat going forward.”
In fact, not only are these new forms of competition serious threats, they are growing by double digit percentages each year, according to numerous sources (see some of the statistical marketplace analysis done by Susan Saltonstall Duncan at Rainmaking Oasis for verification).
Also, the percentages in the survey are based solely on the law firm leaders’ perceptions of whether they were losing any business to compeition. The numbers would be much, much higher if these firms actually engaged market-savvy consultants to survey clients about where they are taking their business. I have heard way too often from lawyers that “clients will send us work when they have it, but they just have not had any to dish out lately.” This is more wishful thinking than reality, at best based on something that a few harried clients might have told business-soliciting lawyers to get them off the phone.
It is also stunning that 63 percent of law firm leaders say that they are not reacting to these marketplace forces with any major change initiatives because “clients are not asking for it.”
Well, when your phone doesn’t ring, and your client hires someone else, that is the sound of your clients “asking for it.” Actually, in many cases, it is the sound of your clients telling you they don’t believe you can or will change your approaches to deliver more efficiency, value, creativity, or speed in production, and that is why they did not “ask” for it.
But you don’t have to wait until your clients stop calling to figure out what is on their minds. You can get ahead of the game by working with professionals who make it their business to know how your clients think.
Using my years of experience as a General Counsel, chief legal officer and reporter who has conducted numerous surveys and client panel events, I love helping firms get inside the heads of their clients to improve service, enhance relationships and grow revenue. Feel free to call for more info about my 75-minute program on “CEO and GC preferences for law firm marketing and services.”