New Law Firm Ownership Rules Won’t Drive Success–Three Things That Will

Hayse LLC
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As talk about more states allowing non-lawyer ownership of law firms is heard, concern over more deeply capitalized competition may be on the mind of some law firm leaders.  No doubt, opening up law firm capital structures to investors is significant, but it won’t change the fundamentals for surviving in today’s legal services market.  Since time immemorial law firms have had to compete for business.  Regardless of a new kind of competitor on the horizon, firms will continue to enjoy success if they focus on service, value, and client needs.

Because service, value, and client needs are table stakes, new entrants to the legal services market will confront the same kind of client expectations law firms do today.  For that reason, overreacting to new ownership may be a distraction.  Rather, law firm leaders should stay clear-headed about what matters and refocus on providing better client service, more value and meeting client needs.

In its In-House Counsel Q&A from September 15, 2020, Thomson Reuters Legal Executive Institute detailed the preferences of one sophisticated legal services consumer.  The deputy general counsel in question said that outside lawyers should (ii) provide practical and business-oriented advice, (ii) be a reliable trusted advisor that can make life easier, and (iii) communicate well.  While there are many ways to meet these requirements, three recommendations come to mind.

Understand the Client’s Business.  Whether keen to provide practical and business-oriented advice or seeking to make a client’s life easier, a thorough understanding of the client’s business is essential.  Digging deep into the client’s business is a fundamental precursor to meeting the first two requirements identified in the Thomson Reuters’ piece.  And because having the ability to communicate articulately and succinctly is also highly valued, knowledge about the client’s business will greatly enhance communication skills.  Think fluency in the client’s business.

Broaden the Partnership (No Weak Links on the Team).  An appreciation of the client’s business must be present in all team members that work for the client, not just the client relationship manager.  When the firm’s appreciation for the client’s business is deep and wide, the client will sense it at every interaction. Moreover, if all team members are thinking about the client’s business, you’ve created an incubator of beneficial ideas.  Big dividends will follow.

Avoid Being Insular (Consider Best Practices).  No one has a lock on knowing how to meet client needs.  Some of your competitors or other industry players may be more effective because they do things your firm does not do. Conversely, the latest client service fad may not be a “best practice” and may advance the ball little.  So, while you look around, consider success stories and reject failed experiments. After alternative practices are vetted, adapt the winning ones to your service model.

New law firm ownership rules (if they come) can be exciting, scary, and different.  But managing your firm through a possible new age does not change the need to earn your clients’ trust and help them achieve their goals.  Will you keep your eye on the ball?

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