Page 238 - 2019 - Leaders in Legal Business (n)
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differentiation strategy (but not both). Cost leadership without sacrificing quality in the legal
services market for a middle-field firm could well be a tall order; after all, how many Ryan Air-
style law firms are in the top 100? He is left with no choice but to differentiate his firm’s service
offering. Although one could say that the changes to the legal market coupled with advances in
technology have forced the John Does of this world into a corner, it may actually be a blessing in
disguise. The emergence of alternative legal service providers is forcing law firms to view their
strategic position along buy (not sell) lines. Thus critical to John Doe’s decision on how to
differentiate his service offering from the rest of the field, is the answer to the question, “which
legal services are being purchased, and how?”
Client Focus
Every law firm makes a promise to clients: “We are the best thing that could ever happen
to you.”
Clients tend to smirk when they hear this; from their perspective, their relationship with
law firms is difficult, to say the least. Why is this the case? It seems that too many law firms do
not stick to a really simple rule: Know your client, and know yourself. In other words, know who
your clients are and why they chose you.
Does that seem too simple? Right, it is that simple. Knowing one’s clients means far more
than sending Christmas cards, or inviting general counsel to lunch or even dinner. It means
knowing clients inside-out, knowing why their CEO can’t sleep at night, knowing what their
appetite for risk is, why their numbers are down (or up), what is happening in their relevant market,
and exactly how they want to receive your advice. And yes, clients are becoming more demanding.
They want quality of service at an acceptable price. Like Amazon shoppers, they want to compare
prices. Traditionally, when clients had a legal problem, they searched for a named law firm. Today,
when they have a legal problem, they search online (yes, including “Google”). Clients are far more
sophisticated when it comes to legal procurement, with clear requirements and excellent
knowledge about the market. In fact, the historical asymmetry in information and expertise
between the client and the lawyer is finding its equilibrium. The number of highly qualified
lawyers moving in-house is increasing,13 and information is becoming more readily available. Not
just legal information, but information about how the transaction is progressing, how the matter is
being staffed, and how much it is costing — and all in real time. This means that John Doe will
have to find a new value proposition for his clients.14
The second bit is: What do we have to offer, and why did they choose us? Not knowing
the answer should make managing partners extremely nervous. This is the current cutting edge of
competition in the legal market. Legal technology offers John Doe the differentiation toolbox that
he needs to design his new service offering. He doesn’t have to replace his associates with robots.
Legal technology offers solutions for everything from predictive analytics to simply providing a
more efficient platform for clients to interact with their lawyers. Firms who are able to differentiate
themselves from their competitors by offering the client additional services, such as legal project
management and legal data analytics, are able to survive — at least until a competitor decides to
replicate those services.
13 See, e.g., The Law Society of England and Wales, Annual Statistics Report (2016).
14 See Emma Ziercke & Markus Hartung, Why the Developments to the Competence Divide (and not the Digital Divide) Will Make or Break the
Law Firm Business Model in NEW DIRECTIONS IN LEGAL SERVICES (ARK Group, 2017).
223
services market for a middle-field firm could well be a tall order; after all, how many Ryan Air-
style law firms are in the top 100? He is left with no choice but to differentiate his firm’s service
offering. Although one could say that the changes to the legal market coupled with advances in
technology have forced the John Does of this world into a corner, it may actually be a blessing in
disguise. The emergence of alternative legal service providers is forcing law firms to view their
strategic position along buy (not sell) lines. Thus critical to John Doe’s decision on how to
differentiate his service offering from the rest of the field, is the answer to the question, “which
legal services are being purchased, and how?”
Client Focus
Every law firm makes a promise to clients: “We are the best thing that could ever happen
to you.”
Clients tend to smirk when they hear this; from their perspective, their relationship with
law firms is difficult, to say the least. Why is this the case? It seems that too many law firms do
not stick to a really simple rule: Know your client, and know yourself. In other words, know who
your clients are and why they chose you.
Does that seem too simple? Right, it is that simple. Knowing one’s clients means far more
than sending Christmas cards, or inviting general counsel to lunch or even dinner. It means
knowing clients inside-out, knowing why their CEO can’t sleep at night, knowing what their
appetite for risk is, why their numbers are down (or up), what is happening in their relevant market,
and exactly how they want to receive your advice. And yes, clients are becoming more demanding.
They want quality of service at an acceptable price. Like Amazon shoppers, they want to compare
prices. Traditionally, when clients had a legal problem, they searched for a named law firm. Today,
when they have a legal problem, they search online (yes, including “Google”). Clients are far more
sophisticated when it comes to legal procurement, with clear requirements and excellent
knowledge about the market. In fact, the historical asymmetry in information and expertise
between the client and the lawyer is finding its equilibrium. The number of highly qualified
lawyers moving in-house is increasing,13 and information is becoming more readily available. Not
just legal information, but information about how the transaction is progressing, how the matter is
being staffed, and how much it is costing — and all in real time. This means that John Doe will
have to find a new value proposition for his clients.14
The second bit is: What do we have to offer, and why did they choose us? Not knowing
the answer should make managing partners extremely nervous. This is the current cutting edge of
competition in the legal market. Legal technology offers John Doe the differentiation toolbox that
he needs to design his new service offering. He doesn’t have to replace his associates with robots.
Legal technology offers solutions for everything from predictive analytics to simply providing a
more efficient platform for clients to interact with their lawyers. Firms who are able to differentiate
themselves from their competitors by offering the client additional services, such as legal project
management and legal data analytics, are able to survive — at least until a competitor decides to
replicate those services.
13 See, e.g., The Law Society of England and Wales, Annual Statistics Report (2016).
14 See Emma Ziercke & Markus Hartung, Why the Developments to the Competence Divide (and not the Digital Divide) Will Make or Break the
Law Firm Business Model in NEW DIRECTIONS IN LEGAL SERVICES (ARK Group, 2017).
223
