Inside Track: Strategies to Reach the Untapped Legal Market: Change the Way You Do Business:

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  • Inside Track
    July
    02
    2014

    Strategies to Reach the Untapped Legal Market: Change the Way You Do Business

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    July 2, 2014 – In this video, futurist Jordan Furlong discusses strategies lawyers can implement to change the way they do business and reach the vast untapped legal market. According to Furlong, 85 percent of the legal market is untapped, and lawyers need to move quickly before this segment is gobbled up by nonlawyer online legal service providers.

    Lawyers Need to Change the Way They Do Business

    When lawyers talk about the legal market, they tend to think about the clients they have traditionally served that are fairly easy to find says Furlong. This is the 15 percent, which surveys consistently show is the limited market that lawyers serve.

    “Let’s change the way you think,” says Furlong. “Define the legal market more broadly as anybody who is in a situation with a justiciable issue – some problem or challenge or situation or opportunity that is legal in nature or related to the law in some way and demands or absolutely requires some kind of attention.”

    “Lawyers are becoming increasingly incidental because we have priced our work and operate our firms in ways that do not and were never really meant to extend to the entire market,” Furlong says. “We are already not anybody’s first choice. We need to turn that around. That is the challenge we now have as a profession. We need to become critical rather than incidental to the functioning of the legal market.”

    How Can We Turn This Around?

    The routes to becoming essential will vary from practice area to practice area. Lawyers and law firms can engage themselves, commit themselves to making changes, and do things differently. They can chart a course back towards the center by focusing on the following three areas:

    1. Understand the cost of doing business;
    2. Rethink and reconfigure your workflow; and
    3. Create your accessibility.

    Understand the Cost of Doing Business

    The cost of doing business is more than looking at the last line on your tax return or the total cost aspect on the spreadsheet. It’s being able to say how much money and how many resources you expend to serve your client. It must further be broken down by types of client, and broken down again to specific clients, according to Furlong.

    “Many law firms believe that their ‘best client’ is the one that brings in the most revenue,” says Furlong, “But, if you have a client that brings in $1 million a year, and you spend $950,000 to service that client, then your profit is only 50K. This not really a great client after all.”

    Furlong says once you understand your costs, you are in a position to fix your prices. You can choose different fee structures, including:

    • fixed or flat rates;
    • rates set in a range of no less than this and no greater than that; or
    • shared risk element fees.

    The shared risk element is telling a prospective client that if they choose you they will pay 80 of the fee. Then, if you hit all the marks you both agree to, instead of receiving 20 percent to get you to 100 percent, you will receive an addition 20 percent – thus earning 120 percent. Furlong notes, in-house counsel are frequently quite open to this arrangement.

    “Being more client friendly with your pricing and the fees you charge is very important because all the new providers – the new competitors – are changing the expectations of the marketplace when it comes to pricing. People are expecting certainty and reliability and they are going to require it,” says Furlong.

    Rethink and Reconfigure Your Workflow

    Process improvement has virtually revolutionized every other area in every other industry (for example journalism, income tax, banking). Process improvement has fairly well left law alone, until now. “That is changing and lawyers have to improve our processes, and we can – through project management, new ways of working and operating, and new ways of controlling the systems by which we deliver our services,” says Furlong.

    Furlong urges lawyers to rethink and reconfigure office workflow and operations. “While practice areas will differ, you can find tools that will allow you to do your work more efficiently and more effectively, and in many cases with a higher degree of quality than current systems allow,” he says.

    Create Accessibility

    Now that you have reworked your systems and your pricing, that 85 percent untapped segment becomes very accessible – you just have to reverse your thinking.

    “We frequently reference access to justice, and what we mean by that is there are a lot of people who cannot afford lawyers,” Furlong says, “This is a serious social problem, which is absolutely true. But, I think it may be more helpful to turn it around, and instead of thinking about people’s access to lawyers, let’s think about lawyers’ access to the market.”

    Who is in that 85 percent not served? Yes, it includes people who don’t have the funds or don’t have the ability to access or can’t afford to engage the services of a lawyer at the prices lawyers are currently charging. But it’s more than just them.

    “Surveys show that almost half of the people with justiciable issues will try to work out a solution for themselves,” says Furlong. “Maybe about a fifth will throw their hands up and do nothing, maybe a fifth will try other solutions such as the government, unions, family, or friends. Only 10 to 15 percent are coming to lawyers.”

    “Reengineer your systems to become an operation that can offer services at fees lower than have been offered in the past. But, because you have also reduced the cost of doing business, you still turn a profit, perhaps you even turn a higher profit,” he says.

    This is Furlong’s last of a three-part InsideTrack video series. In Part 1, Furlong talked about how technology, competition, regulation, and the economic downturn are changing the fundamentals of the legal market. In Part 2, he discussed the 85 percent of the legal market that is virtually off lawyers’ radar, but clearly is targeted by nonlawyer legal services providers.

    Watch the earlier videos, “Three Factors shaking Up the Legal Marketplace,” WisBar InsideTrack, June 4, 2014, “Is the Untapped Legal Market on Your Radar?” WisBar InsideTrack, June 18, 2014.

    About Furlong’s Presentation

    Furlong presented “The Empty Courtroom? Preparing for a New World of Litigation, Dispute Resolution and Appellate Practice” at the State Bar of Wisconsin PINNACLE® Litigation, Dispute Resolution, and Appellate Practice Institute in Milwaukee last month.

    Select programs from the institute are being offered as webcast seminars. The first institute webcast is “The Disappearing Jury Trial: What Does It Mean for the Practicing Lawyer?” on July 16 and July 23 from 8:30 to 10 a.m., 10:30 a.m. to 12:10 p.m., 1 to 2:40 p.m., 3 to 4:40 p.m. Tuition for institute webcast programs is $99 for members, and $119 for nonmembers, and is included in the cost of the Gold and Silver Ultimate Passes. The first two webcast offerings are complimentary for conference attendees.