The last 24 months of dramatic change driven by the global COVID-19 pandemic has placed a spotlight on key business outcomes and accelerated digital transformation in law firms. Each of these outcomes, coupled with how people and processes can be empowered digitally through the application of technologies, will be explored in this five-part series for firms. The series aims to provide insights into the five critical business outcomes:
- Understanding Your Customer
- Optimizing Your Business
- Innovating For Growth
- Enabling Your Workforce
- Protecting Your Digital Assets
Part 3: Innovating for Growth
Innovation is one of the most powerful ways to drive business growth. Through digital transformation initiatives, mid-tier law firms have an opportunity to drive impactful and lasting change that will stimulate growth, elevate their stature in the market and allow them to successfully compete with companies of all sizes.
The Post-Pandemic Legal Industry
Like most industries, the legal community was greatly impacted by the 2020 pandemic. Despite the pandemic-driven changes, such as working remotely and the addition of digital technologies, mid-tier and large law firms alike have experienced growth. Research suggests that demand for legal services in 2021 increased as the industry saw in the first three quarters that revenue growth was between 17-18% above market value, with large firms leading. Likewise, the cost for legal talent in the past 18 months also saw an increase. While mid-tier firms have seen smaller percentages of growth and are less likely to afford costly talent, significant opportunity remains to compete with larger firms. By looking at their growth and go-to-market strategies, and their offered products and services, mid-tier firms can shift their thinking and reimagine new business models.
Strategies For Growth
Firms must look through their own unique lens and question whether they will grow organically or inorganically. Looking at other industries that have a similar genetic make-up, many organizations have grown through consolidation in the form of mergers and acquisitions. Others have benefited from hiring specialists and diversifying new practice areas. There is also significant opportunity in forming strategic alliances and creating a team of different specialists, such as an MA lawyer working in partnership with an IP lawyer to create greater opportunity for all in servicing a client.
Go To Market
Leveraging the appropriate digital technologies like we discussed in our Part 2 Series of Optimizing Your Business can also help mid-tier firms leapfrog ahead of their competitors. Investing in technologies like Artificial Intelligence (AI) and Robotic Process Automation (RPA) can provide significant workflow automation that drives efficiencies, enables firms to settle cases faster, empowers staff to focus on higher value-added tasks and generates more revenue. These technologies also provide more transparency and collaboration with clients allowing them to engage in all areas of their case management, providing a customized and positive client experience. Research suggests that 50-55% of the revenue generated by firms is in the actual contractual work, redlining documents and research. Embedding automated technologies into the fabric of these daily practices can significantly reduce the time it takes to complete tasks allowing staff to focus on innovating and expanding its client base.
Product and Services Offerings
With the advancement of technologies, law firms can expand their product and services beyond the practice of legal advisement. Law firms can collect and analyze vast amounts of data from various data sets including case law, court records and legal documents. Firms can then use this analysis to develop insights into case strategy, client behaviors and legal trends, enabling proactive and informed decision making. Likewise, firms can dig deeper into data and provide client-facing insights from data sources that will enable the client to run their business more efficiently.
A key example of reimagining products and services differently is to look at Alternative Legal Service Providers (ASLPs). These organizations are non-law-firm providers or law firms with built-in delivery systems that perform legal support work like contract management, discovery or compliance at a lower cost structure than traditional firms. Traditional law firms have the capability to expand or outsource their services or perhaps strategically align with a ASLP to reach their strategic goals.
The Role of Corporate General Counsel Post Pandemic
Just as firms have seen significant change post pandemic, so has the role of the corporate internal general counsel. Historically the role of general counsel has been on the back-end whether reviewing a final contract or addressing a legal issue. With the onset of remote working and new technologies such as AI, RPA and Blockchain, general counsel must be engaged from the beginning, taking on a far more proactive role in engagements and projects. Legal must have a seat at the table from the beginning so they can parallel legal implications with project activity, otherwise corporations risk significant delays.
Discovering new ways to drive innovation by evaluating growth and go-to-market strategies, as well as a firm’s products and services, will significantly shape the future for mid-tier law firms and enable them to drive impactful and lasting change.
About Cherry Bekaert Digital Advisory
Cherry Bekaert’s Digital Advisory team is comprised of strategists who have broad industry experience and keen business acumen. Utilizing an agile and flexible approach, we help examine what you want to achieve with a focus on people, process, technology and culture. We are here to help organizations manage risks, enable growth and support sustainable operations. Leveraging our strategic process, we help digitally enabled organizations – especially middle-market companies – do more with less. Cherry Bekaert stays on top of the latest technology trends, but we know that technology is not a one-size-fits-all solution. Cherry Bekaert is here to guide you on what technology makes sense to adopt as it pertains to delivering the highest value to your organization.
Articles from this series:
