It is a well-known fact that law firms have struggled to keep their head above water since the GFC because it was not something they were prepared for. The supply-demand imbalance for legal services due to low business confidence resulted in declining revenues for most firms (something law firms were not used to) forcing firms to adopt significant and instant cost cutting measures. As salaries got capped, working hours increased and so did the stress to deliver high quality work. This in turn led to high rates of depression amongst lawyers, impacting on their ability to perform their duties effectively and efficiently. At the same time, the legal industry experienced increasing competition from management consultants and IT professionals.
However, the doom and gloom in the legal industry seems to be blowing over this year and as law firms enter an era of cautious optimism, they find themselves operating under new values with significant shift in strategic priorities. They are finding themselves in the midst of an interconnected world where new opportunities arise fast and are snapped up by tech savvy competitors even faster.
Given this new landscape, here are four key steps law firms can take today to maximise new opportunities, become more agile to keep up with the ever changing world, and race ahead of the competition to future proof themselves.
1. Reach for the cloud: while the legal industry has been cautious of cloud adoption, traditionally relying on more manual systems and in-house servers, it is important to recognise that lawyers are not IT or security professionals. Physical servers and hardware need maintenance, upgrading and physical space. Furthermore, increasing local data storage is a costly and time-consuming process that requires forward planning. In the age of information overload, the need for ever increasing data storage space is something law firms need to be prepared for. Cloud adoption allows law firms to let the cloud provider take care of all the maintenance and upgrades while being able to increase storage space if and when required almost instantly. According to Thompson Reuters, Australian businesses using cloud services could reduce their capital expenditure by up to 50%.
2. Embrace mobility, increase collaboration: increasing globalisation and workforce mobility has made collaboration critical to the success of any law firm. However, with multi-site offices, competing priorities and proliferation of mobile devices, regular face to face meetings are nearly impossible. This is where firms can leverage the power of cloud based technologies to collaborate in real-time and share and store informtion seamlessly. Software-as-a-Service (SaaS) based technological solutions offer law firms access all hours and facilitate document retrieval on a needs basis. Such solutions enhance productivity, enable multi-tasking and save time, all improving bottom line.
3. Keep in step with the new breed of clients: clients today are increasingly connected, more informed and more demanding, gaining fast insights into reputation of law firms through social media and Internet. Therefore, customer centricity has never been more important for law firms to future proof themselves from demand fluctuations. Customised service and the ability to speak the client’s language have both become critical to attract and retain clients. Cloud technology and software applications that allow lawyers to connect with their clients in real-time, minimise human error, and simplify their advice play a major part in ‘wowing’ clients. Furthermore, cloud based technologies help individual practitioners within a law firm access client information easily, from anywhere, enabling the firm to develop an enterprise view of the client. This prevents client attrition because client loyalty is directed at the firm rather than an individual practitioner within the firm.
4. Love thy staff: the legal industry is traditionally labour intensive; therefore, improving productivity means higher profit margins per partner. However, since the GFC the pressure to work longer hours, capped salaries and tighter budgets, have exacerbated the work-life imbalance leading to high levels of depression amongst lawyers, adversely impacting productivity. A survey of the legal industry in 2013 indicates that 37 percent of the legal workforce in Australia suffers from moderate to extremely severe depressive symptoms. In order to gain maximum value from staff, technology should be used to improve productivity and enable a better work-life balance. Major legal firms are adopting and internalising technologies to establish significant differentiation, reduce reliance on labour for search, review and management of commercial and client information, and improve the quality of time staff spend at work. Happier staff are more productive, more loyal and deliver better results, which ultimately impacts the bottom line.
Cloud based technology provides many opportunities to law firms whether it in the form of social media or professional software. The rapid uptake of technology in the corporate world has already proven the benefits for organisations when it comes to facilitating global reach and delivering improved client service while reducing operating costs. It is time for legal industry to, therefore, also take advantage of the cloud to become agile, relevant and competitive.
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Lawyers, accountants, corporate advisors and lenders must review and cross reference official documents from a range of sources, to verify facts at the beginning of every matter.