Legal Industry Trends: Competition, Change and Challenge
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1 Legal Industry Trends: Competition, Change and Challenge Presented by David Freeman, J.D. LI02 Friday, 10/4/2013 4:00 PM - 5:00 PM
2 Legal Industry Trends: Competition, Change and Challenge Presented by: David H. Freeman, J.D. David Freeman Consulting Group, LLC Change Averse Culture Altman Weil 2013 Law Firms in Transition Survey: Leaders assessed their partners awareness of the changing marketplace at a median 6. Only 5.3% of leaders considered partners to be highly aware (in the 9 10 point range). (W)e asked about partners level of adaptability to change. Law firm leaders rated their partners adaptability at a median of 5, with only 2.2% describing them as highly receptive to change. 1
3 Growth is Dead: Now What? Bruce MacEwen, Author Create a very defined set of services for a carefully identified narrow category of clients Deep investment in systems, technology, processes, people Wring cost out of the system Technology-enabled business processes Growth is Dead: Now What? Bruce MacEwen, Author Three keys to success in the new world order: Acknowledge you have competition Hire great managers Articulate and execute a non-generic strategy 2
4 Battle for Market Share Form client teams Plans, goals, strategies, action items, evaluation Solicit client feedback Deliver added value Compensate for effective client management Growth is Dead: Now What? Bruce MacEwen, Author Industry Overview: 6 P s Pursue Poach Protect Purchase Plan and Process 3
5 Client Focused Culture Leadership Planning Build consensus Align people, groups & systems Skill building Communication Action plans Accountability & implementation Tracking & measuring Timelines Data LexisNexis Client Profiling provides in depth analysis of historic client growth patterns and incorporates competitive intelligence to make business development recommendations for a law firm s clients. Lifetime work volume Types of work Industry Relationship strength Consistency of work volume Practice group cross sell Share of wallet Billing rate 4
6 Data LexisNexis Client Profiling Lifetime value (LTV) assessment of all active clients Attrition risk assessment of all clients Segmentation of 100 highest value clients into target growth and low opportunity clients High level action plan for 100 highest value clients Aggregated footprint analysis of the top 100 clients highlighting key work trends, share of wallet and top competitors Senior Team Planning Consensus on vision and goals Strategies/tactics/priorities Determine roles Develop measures Adjust compensation Develop tracking and reporting 5
7 Client Surveys and Feedback Prioritizing clients Process and frequency Acting on feedback Client/Industry Teams Identify targets Team dynamics Team standards Team roles Client feedback Exceptional service Cross-selling Market visibility Tracking and reporting 6
8 Client Service Training Delivering value to clients appears at number eight on the list of challenges Altman Weil 2013 Law Firms in Transition Survey Best practices (e.g. ACC Value Challenge) Specific tactics Staff service committee Rewards and consequences Cross Selling (Serving) Cross offices Cross practices Leader meetings 7
9 Obstacles to Cross Serving Inertia Internal and external communication Trust Understanding client needs Understanding our lawyers needs Capacity Credit Lack of comfort/skill Lack of planning Accountability, follow through and tracking Cross Trusting Raise internal visibility Build internal relationships Give Educate Cheat sheet Joint marketing Attend group meetings Support cross group initiatives Cross offices 8
10 Lateral Integration Selectively acquiring laterals and groups who come with their own ready-made books of business is the preferred growth strategy post-recession. Firms are beginning to think about trading up to improve profitability, rather than bulking up to drive gross revenues. Altman Weil 2013 Law Firms in Transition Survey Lateral planning Selection and hiring Systematic internal integration Client development planning Selling skills Lateral mentor Sales Planning/Training/Coaching We asked firm leaders about their greatest challenge in the next 24 months. Increasing revenue was their number one answer, followed by generating new business Altman Weil 2013 Law Firms in Transition Survey High potential lawyers Best practices Specific tactics Commitments Associates committee 9
11 Alternative Fees Ninety-six percent of law firm leaders say they believe 'more price competition' is a permanent change in the legal market in 2013 Altman Weil 2013 Law Firms in Transition Survey Targeted practice areas Data driven Legal project management Ninety-six percent of survey respondents also believe that a 'focus on improved practice efficiency' is a permanent change in the legal market Based on client needs Pilot with key clients Adjust compensation Use as sales tool Leadership Development Culture Authority Leadership styles Input on compensation Planning Buy in & motivation Cross selling Tracking, reminders & reporting Ongoing training 10
12 Implementation Personal Accountability Timelines Tracking Measuring Reminders Reporting Implementation Task Force Rewards & Recognition Internal External 11
13 Benefits Worksheet Client feedback Client/industry teams Cross selling BD focused leaders Lateral integration Sales and service skills Accountability systems Firm and group retreats Total Phase 1 Phase 2 Phase 3 Ongoing Senior Leadership Culture Assessment Senior Team Planning Client Feedback Firm-wide Planning Firm-wide Lateral Integration Process AFAs & Project Management Rewards & Recognition Monitoring Mid-Level Leaders & Professionals Implementation Task Force Session Leadership Training Practice Group Planning Task Force Tracking & Reporting Task Force & Leadership Tracking & Reporting Promote Successes Task Force & Leadership Tracking & Reporting Promote Successes Individual Lawyers Training & Planning Partners, Laterals and Associates Key Client Teams Cross-Selling Initiatives Client Service Training Associate Mentoring Ongoing Reminder/Skill- Building Meetings Staff Client Service Training for Staff Staff Client Service Committee Internal Coaching Training Ongoing Tracking, Measuring & Reporting Ongoing Tracking, Measuring & Reporting CultureShift Architecture 12
14 Exercise What high priority areas should we address in our firms to properly adapt to these trends? Top Of Mind 13
15 Legal Industry Trends: Competition, Change and Challenge Presented by: David H. Freeman, J.D. David Freeman Consulting Group, LLC
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