Legal Market Rebirth

Now is when legal service providers must embrace how business works and align accordingly.

If anything good is to come from the global pandemic, it’s a rebirth opportunity that enables legal service providers, including law firms, legal companies and individual lawyers to recalibrate their operations and run like laser-focused, bottom line-driven businesses.

Now is when – before it’s too late.

This time of rebirth provides an opportunity to trim down to fighting weight in order to thrive rather than merely survive. This means streamlining service offerings down to only those that the legal market wants now and in the future. This, in turn, means spinning off practices or services that no longer answer client needs or fit into the business. Doing so enables the establishment of a tightly targeted, differentiated and client value-obsessed position in markets that are key to the success of a legal service provider’s enterprise.

This is best done by:

• Providing only those services at which a firm/company/individual excels
• Servicing only those industries and clients to whom offerings are critical and valuable
• Developing a go-to talent pool or skills set specifically tailored to support these goals

And, most importantly, excluding everything and everyone else.

Ruthless? Not really. Strategy is about knowing how to say no.

Do What You Love and Money Will Come

In addition to saying “no”, strategy is about being true to you – whether “you” are a firm, company or individual – and doing only the work you do best and want most.

A couple of business adages resonate with me: “Do what you love and money will come,” “If you love what you do, you’ll never work a day in your life” and my guiding light, from Shakespeare’s Hamlet: “To thine own self be true.”

I’ve learned by doing that the first two adages are absolute truths and the quote was bred in my bones. I’ve been through a few careers in my time and they hold me in good stead to this day, but for the last 20 years I’ve been doing what I’m very good at, love that I get to do it, and am passionate about clients with whom I work.

Now I’m privileged to be considered one-of-one and a go-to for what I do, which is working alongside law firms, legal companies and individual lawyers to help them differentiate and position in critical markets and industries, and build profile and develop business with key clients who value their offerings. This enables the legal service providers with whom I work to enjoy what they do for a living and thrive in their professional lives, and results in their achievement of healthy revenues and profits.

Working with lawyers successfully in this manner isn’t magic and neither is it rocket science. It’s about insight, perseverance, patience and faith. Mostly, it’s about helping them get out of their own way.

Service Offerings

It’s folly to think that every dollar is a good dollar. This isn’t true especially when you do work that is outside your wheelhouse or out of scope in terms of the legal services at which you excel.

This is why it’s true that marketing yourself as everything to everyone means you’re nothing to no one.

What is also true is that time is finite, but money isn’t. Time is finite because there are only 24 hours in a day. But by doing only the type of work you love to do and do well, you’ll be the go-to and, as a result, money can be infinite.

Targeting services – whether for firms, companies or individuals – has four key factors:

1. Focus solely on what you do well.
2. Ensure that what you do well is also something you love to do.
3. Target only industries and key clients within those targeted industries who will value your offerings and with whom you want to work.
4. Stay in your lane. In other words, stay true to yourself and what you do well.

While focus, determination and diligence are all necessary factors for success, I have yet to experience an instance when this four-step strategy hasn’t worked. That’s because it’s successful every time.

One of the reasons it’s successful is because clients don’t care about your practice; they care about their industry. And because they care about their industry, they pay greater attention to those who serve it.

Keep in mind that there will be prospective clients within your target industry that either don’t value your offerings or aren’t aligned with you in terms of work styles, ethics, temperaments, etc. This is to be expected and absolutely fine. You don’t want every prospective client. Instead, you want only those clients with whom you align.

Many years ago, a client firm of mine struggled to scope its offerings to what it did best: commercial real estate. Instead, the lawyers kept accepting whatever work came in the door. As a result, they were doing everything for everybody, got spread too thin, and were becoming exhausted and frustrated. By analyzing and narrowing their client roster, we determined there were enough industry-relevant clients for whom the lawyers could do commercial real estate work.

Doing so enabled them to stop handling residential real estate, wills, and other matters that were outside their scope of expertise. This, in turn, resulted in opening capacity in terms of time and energy to take on more commercial real estate work and they were able to refer out-of-scope matters to residential real estate colleagues, will and estate lawyers, and others who were able to reciprocate.

I’ve coached individual lawyers in the same fashion. Every single one of them who has had the grit and guts to narrow his or her practice and focus on either a targeted industry or particular type of clientele has hit their career sweet spot. They’ve gained a reputation as the go-to lawyer for their particular expertise, and are thriving and loving what they do.

For example, “Stay in your lane” was advice provided to a solo lawyer last year. Since then, she has reaped the benefits of targeting and perseverance, and been deluged with the kind of work she loves most from a client she’s always wanted within a narrowly defined sector. She has also relocated to a larger office, hired more help and declined an invitation to add her practice to a name brand firm.

In each of these situations, like in every instance, success is never accidental. Success happens by design, and is aided by perseverance and patience.

Industries and Clientele  

It’s a well-known business rule that 80 per cent of your business comes from 20 per cent of your clients.

This usually means that whether it’s obvious or not every law firm, legal company and individual lawyer has a set of industries they currently serve. Therefore, it’s smart to learn what these industries are and stick to them. If, and only if it makes sense, you may want to carefully consider adding only those industries that are ancillary to the core sector(s) currently served. Go no further.

In Toward Industry Alignment, I outline how to use North American Industry Classification System (NAICS) or Standard Industry Classification (SIC) codes to ascertain your sector strengths based on your current client roster. Using NAICS or SIC codes are recommended because they are chosen by the clients themselves. They know their business better than anyone and, as a result, these codes are indisputable.

An industry team is a kissing cousin to a key client team. However, an industry team is often more successful because of its deep sector focus, which includes a wealth of prospective clients.

The key to a successful industry team is that it must be sector-proven to be credible to clients. When I’ve helped create an industry team, potential members must provide resumes detailing work experience in that specific sector. This often unpopular yet enormously effective tactic winnows out legitimate expertise from pretenders. Because fact is separated from fantasy, the result is an efficient, credentialed and compact core team.

Most importantly, this method provides evidence for industry clients that the sector-specific team members have real world knowledge, are fluent in the industry’s language, and have hard core and shop floor experience to prove it.

The concept of specialization encompasses both targeted services and industry expertise. Specialization features prominently in the Wolters Kluwer 2020 Future Ready Lawyer Survey: Performance Drivers that found significant gaps between what clients want and what law firms think clients want.

The importance of specialization was ranked second among the top five reasons why clients would switch firms.

The survey found that 80 per cent of legal departments said it was important that a firm specialize in the types of services they need with only 34 per cent saying that describes their current firm very well. This assumes that 46 per cent of legal department respondents describe their current firm otherwise.

There is also a gap of understanding that specialization matters more than price:

When evaluating law firms, criteria most important to corporate lawyers are a firm’s ability to: specialize, use technology to improve productivity and understand client needs.

Law firms believe price is the top criteria on which they are evaluated, followed by the ability to understand client needs and specialization.

The survey of 700 lawyers in law firms, legal departments and business services firms across the U.S. and nine European countries was conducted in January 2020. 

Talent and Skills Sets 

Many traditional law firms carry dead weight and know it. Yet few do anything about it. Instead, they carry people and practices for two main reasons: 1. We’ve always done it this way; and, 2. Doing nothing is easier than doing something.

But this is how a lethargic and stodgy social club operates. It’s certainly not how a high-functioning legal enterprise runs a lean, bottom line-driven business.

The price of admission for a traditional legal life compounds this complacency. Top marks are one of the key criteria for student admittance to law school. For law firm laterals, it’s a book of business. But are these the right measurements? Just because you’re smart doesn’t mean you’ll be a good lawyer any more than promising to be accompanied by a herd of clients means they will follow.

Businesses that are outside of the legal industry hire explicitly for positions that need to be filled so that products and services their customers want are delivered as expected. Conversely, law firms often hire for smarts rather than alignment with services the firm provides. As a result, individuals can be allowed to stray beyond the firm’s core areas of service because of a willingly naïve belief that doing so enriches the firm’s offerings.

But this is not so. In fact, it is the worst type of slippery-slope scope creep that a firm can entertain because all of its service offerings become watered down. The most obvious symptom is that the firm becomes bloated beyond recognition—a dead giveaway being an ever-expanding list of services and practices complete with a myriad of chairs and co-chairs—and its brand literally becomes diluted and convoluted to where clients can’t identify the firm from its competition.

At this point it’s painfully clear that the legal service provider, regardless of structure, size, practice, industry focus, specialization of service or jurisdiction, has become distracted by placating egos rather than serving clients and its focus has drifted away from the business of running a business.

Clients Call the Shots

We’re in a buyer’s market. We have been for some time and will continue to be for many years to come. This means that clients call the shots and want their matters executed with maximum efficiency regardless of whether the work is handled by a law firm, legal company or individual.

This is why right minds trump bright minds, and aptitudes and temperaments of legal service professionals of all types, stripes, business experiences and backgrounds along with the development of particular skills sets are so very important.

It’s also why providing targeted services to select industries with key clientele are paramount to running a lean, efficient and thriving business.

The combination of these factors enable a legal service provider to excel to the point of being one-of-one rather than one-of-many. This is exactly the level of legal market differentiation that is beneficial right now. And, it will continue to be advantageous well into the future.