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What can make a law firm’s brand shift so significantly in a 12-month period? Law firms are akin to large ships that are slow to turn. Most firms set a five-year strategy and are not chopping and changing every few months — and if they are, it’s likely to be a sign of a firm that is not effective at making waves externally.
So, law firms need to set a strategy that is built on their strengths and informed by objective, comprehensive market intelligence. This will show the direction of travel for their clients and how the firm can best adapt to any directional change. Firm leaders need to execute on this strategy while keeping close check on progress and contributing objectives. Over time, say in three to five years, the firm should see results.
Thomson Reuters’ newly published 12th annual Global Elite Law Firm Brand Index 2022 shows how law firms that set these longer term strategies, while keeping their clients’ needs as a North Star, have best navigated the still-choppy waters of the legal environment in 2022.
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Indeed, the shifts in client sentiment during the pandemic led to some suddenly turning their back on their most trusted high-reputation lawyers — at least in the short-term — were the kind of temporary change that can elevate or damage of a brand visibly, even within a 12-month cycle — depending, of course, on relevance of the firm’s strategy to its clients at that time.
<b>Finding the way that works for your firm</b>
There is no one formula for success. Some law firms have gained above-average levels of favorability for providing great quality expertise at a good value; others are doubling down on key practice strengths like M&A and accepting no low-ball work offers. Still, what works for one firm won’t necessarily work for another, and what makes one firm different could be its very own superpower. So, while it’s important to keep close check on your competition, it’s not a winning game to try to emulate them too closely either.
Looking ahead then, where is the greatest growth opportunity for law firms?
First, firms would be wise to pay attention to two key practice areas, based on clients’ legal spend projections. M&A saw the biggest shift in terms of predicted growth over the last 12 months, so we expect this area to continue to provide a brand boost for those law firms that can demonstrate their strength in M&A. Also, regulatory work is the area of legal budget expected to see the greatest increase this year, according to our research. Regulatory work is a very fragmented practice area because the work type is so specific to each client, depending on their business, industry sector, and geographic footprint as international companies have to comply with local regulators in multiple markets, not all of which have a consistent approach.
Second, all law firms would benefit from building a brand that will be relevant and differentiating in 10 years’ time. More than a decade of research has shown us increasing levels of client satisfaction — law firms seem to be doing a better job at pleasing clients. And, as the bar rises, clients’ expectations are increasing around how they will be serviced. High levels of satisfaction with factors like Quality of advice, Speed of response, Communication and even Business understanding are becoming the norm, which unfortunately decreases the opportunity for a firm to stand out by doing a particularly good job in that area.
Innovation and Value are the only two aspects of service (out of the 12 that we measure) in which we see a gap in the market. Few firms get high scores in these areas, yet both are important to client relationships. And as corporate law departments come to rely more on external counsel, value in particular will become even more important.
Proactive risk mitigation and Cost/value control also represent key strategic focus areas for clients. Unfortunately, our research shows that these areas are also where clients say their law firms are not landing coordinated, innovative solutions. As a result, clients are not waiting for firms to catch up — they increasingly are building their own mechanisms to control, monitor, and assess spend and efficiency of legal service delivery.
<b>Keeping client communication open</b>
So, what can firms do to address this? The number one way is to talk to your legal clients. Firms should ask clients what they are anticipating for the year ahead. What are their greatest challenges and strategic priorities? What is most important to them in the working relationship, and how best you can support them in issues big and small? What does value mean to your clients? Gathering all of this insight can deliver the data that law firms need in order to make good decisions about where to invest their resources, time, and talent.
While our research shows us that legal spend is on the rise with unprecedented predictions of growth, firms will have to undertake careful targeting of clients and be strategic about where to focus efforts in order to capture that increased spend. Identifying which clients or segments on which to focus and where return is expected to be greatest for the effort required are not easy tasks. Nor is assembling a team that draws expertise from across disciplines and geographies, and collaborating effectively across this team and with clients.
Yet, for the best chance of success, law firms need up-to-date reliable intelligence about their clients and market. More importantly, firms need to act on this knowledge and use it to inform, shape, and adjust their strategy.
As the new Global Elite Law Firm Brand Index shows, the strong connection between brand strategy and client service strategy is undeniable, and those firms that execute well on their legal service delivery strategy also will continue to strengthen their brand in the minds of their clients.