3 Important Changes Predicted for Law Firms in Next Decade

3 Important Changes Predicted for Law Firms in Next Decade

A recent Bloomberg Law article by Jaap Bosman of TGO Consulting, a law firm strategy consulting group, provides some thought-provoking predictions for law firms in the next decade:

Prediction #1: Value-Based Pricing Will Become the New Paradigm

Bosman notes that the pricing of legal services has gotten plenty of attention over the past decade, with clients placing increasing pressure on pricing and law firms pushing back to protect profitability. The result has been that prices continued to rise, enabling firms to grow revenue while demand for their services remained largely flat.

Good for firms, you may say, but clients remain unhappy. Which is why Bosman says this arrangement will not be sustainable in the coming decade.

This is because discussions about price have historically revolved around hourly rates and time is not the correct measurement. Whether or not something has value is not based on price or time. An hour spent litigating in court does not have the same value as an hour on a conference call.

Bosman says that data analytics demonstrate a strong direct relationship between value perception and return on investment. Clients do not mind spending on something that helps them create profit or avoid loss. This is why, he says, both law firms and clients will come to embrace value-based pricing over the next decade, which will lead to greater client satisfaction and stronger relationships.

Prediction #2: Swarm Intelligence Will Become the New Norm in Law Firms

Today, most law firm partners are in competition with each other for clients because of how firm profit distribution practices are structured. If there are two partners who practice the same type of law in a firm, they will compete for the same client.

Law firms are typically organized into silos, by practice area. However, clients operating in an increasingly complex regulatory, political, and technological environment have problems that are too complex to be solved by just one individual.

Law firms will need to break down their practice silos and tap into the combined creativity and problem-solving ability of many others in their firm to meet the needs of their clients. This is called “swarm intelligence,” and Bosman predicts it will become the new norm in law firms as they realize the benefits clients receive from collaboration.

Prediction #3: Non-Core Activities Will be Outsourced

In order to keep and attract top-tier legal talent, law firms must maintain their profitability. Doing so depends not only on increasing revenue but also on cutting fixed costs.

Bosman predicts that over the next few years, we will see law firms shrinking their core group of attorneys to only the best and most profitable and outsourcing low-value work to other firms. They will also outsource non-legal functions — IT, marketing, finance, human resources, etc. — to professional third-party providers.

So what can you do to prepare your law firm for the next decade? Attend a Rainmaker Retreat, where we’ve given over 18,000 attorneys a blueprint for success – a road map for building a 7- to 8-figure lifestyle law firm. Many of them started their journey by attending a Rainmaker Retreat and walking away with a marketing plan they could implement immediately.

Our first Retreat for 2020 will be in Scottsdale, AZ, on March 20-21. We are offering a limited time $200 discount for this session. Register online now and use this coupon code: SPRING.

 

 

 

Recent Posts

Categories
Archives