Winning new clients is a necessary but challenging proposition for today’s small to midsize law firms. The 2016 Law Firms in Transition survey conducted by Altman Weil (available at www.altmanweil.com) found that many law firms suffer from an “inefficient delivery of legal services” and fail to use “proactivity as a competitive advantage.”
The fact of the matter is that companies, and the corporate legal departments that hire law firms, have a need for outside counsel who specialize in certain practice areas and locations of business. However, many law firms struggle to find ways to make themselves attractive hires for in-house counsel. Setting themselves apart from the competition is an ongoing challenge for many firms, and they lose out on business because of their inability to differentiate their services and expertise.
But it doesn’t have to be that way. Here are the top five ways that law firms can bolster their operations and infrastructures – and improve their competitive advantage.
1. Bolster Security
Corporations are increasingly focusing their time and resources on security – and they are expecting their law firms to do the same. Highly publicized leaks – such as the so-called “Panama Papers” where sensitive documents were stolen from the law firm of Mossack Fonseca – have only heightened concerns.
Joe Kelly is founder and CEO of Legal Workspace, offering law firms operational solutions using virtualization, connectivity, and hosting technologies. This article was originally published in ABA Law Practice Today, October 2016, Client Issue.
Yet according to the Blickstein Group’s Eighth Annual Law Department Operations Survey (available at http://blicksteingroup.com), only slightly more than half of law department operations managers consider their law firms’ ability to protect their data as “highly effective” or “somewhat effective.”
To set themselves apart from competitors at other law firms, it’s important for attorneys to be able to demonstrate that they have cybersecurity protocols that will meet and exceed corporate requirements and industry regulations. This includes installing systems with enhanced security for emails, data in transit, and information that resides behind the firm’s firewalls.
At a minimum, law firms should have intrusion detection systems and two-factor authentication. Firms also must insist that attorneys and staff always encrypt emails, to keep sensitive and confidential communications safe from deliberate hacks or accidental leaks. Top-notch security is worth its weight in gold when attracting new business and protecting existing clients.
2. Create Better Budgets
Corporate legal departments are increasingly facing pressure to develop and maintain their own budgets. It’s not enough for in-house counsel to offer vague predictions and insist to their bosses that it’s impossible to predict legal costs. As a result, they are applying the same expectations to their law firms. Budgets that outside counsel submit to their clients must be predictable, accurate, and stable in order to get new business and maintain the clients that they have.
Budgeting in this capacity can be a daunting task. Fortunately, law firms don’t have to completely solve this situation overnight. They can communicate with legal departments to find out which matters have been the most unpredictable in terms of cost, then target those areas first for improvement. Law firms can also leverage their billing software to create metrics that will allow them fresh insights into past and current matters, then use that information going forward. Accurate budgeting demonstrates that law firms can successfully allocate resources and work efficiently.
3. Improve Efficiency
Law departments are also expected to become more efficient. In turn, they are demanding that their law firms become more efficient. The more efficient law firms are, the more they can stay within budgets – and the more money they can ultimately make.
Law firms can improve efficiencies through the right software and processes, and by assigning the right people to the right tasks. There are no magic bullets or perfect programs that will work for every law firm. It’s important to look at the firm’s areas of specialties, goals, and current staffing levels to evaluate what will truly improve efficiencies, what will not offer significant improvements, and what can set the firm’s efforts back.
4. Comply with All Outside Counsel Guidelines
Many legal departments have created standards and processes for their law firms, and they expect that their law firms will follow them. Outside counsel guidelines can cover anything from how to bill, limits on billing, who is approved to bill, travel expenses, business codes and conflicts, diversity, and staffing. In many ways, these guidelines are extensions of the corporation, its security, and its culture.
These guidelines can be very specific, and one client’s guidelines may differ dramatically from another client’s. Law firms may be tempted to ignore guidelines, or not comply fully. However, corporate legal departments can quickly decide not to work with lawyers who don’t comply and find others that will.
The results of not following guidelines may have a long-term effect as well that dissuades onboarding future clients. After all, if lawyers or paralegals disregard one guideline, then the chances are they are less likely to follow future corporate guidelines.
5. Respond Quickly
In today’s 24/7/365 culture of connectedness, in-house counsel expect to be able to reach their attorneys immediately. That means law firms must be prepared to respond, and have the technology and infrastructure in place to do so. Along with office phone numbers, law firm attorneys should be prepared to provide mobile phone numbers and regularly check email. They also need to be able to access client files and data wherever they are, in case a client has a question that requires some research.
Moving the firm’s data to a secure cloud-based system is one way to allow secure access to information 24/7. Doing so can also improve responsiveness and reduce IT infrastructure and tech support costs. Some legal cloud providers offer greater security features than a firm could implement independently, which could potentially solve more than one problem.
To minimize those last-minute requests as much as possible, lawyers should schedule regular updates and reporting sessions with their clients. This will allow lawyers to anticipate problems and troubleshoot minor issues before they become major ones.
Now, more than ever, lawyers must combine their talent for practicing law with their business acumen to attract corporate clients. By demonstrating their firms’ savvy, security, responsiveness, and proven compliance with outside counsel guidelines, lawyers can significantly increase their chances at winning corporate business.