A recent report from Arden offered insight that should interest law firms. It suggested that 3.6 million adults in the UK have an unmet legal needs involving a dispute each year. On top of that, 50% of small businesses each year are forced to handle legal issues without expert support. The biggest factor in the decision not to find legal help was the cost. Simply put, the public view lawyers as too expensive.
According to Unbiased, in the case of general litigation, a lawyer in the UK can cost between £100–300 per hour on average. The Arden report suggests that, based on those numbers, the annual revenue that has not yet been captured is approximately £720 million. That’s a huge amount of customer needs that lawyers and legal consultants should strive to meet. But how?
In this article, we will discuss how platform law firms are beginning to meet those customer needs and how small law firms can adapt to compete.
Unmet customer needs stem largely from cost. Simply put, lawyers are not seen to provide good value for money. But legal consultants are starting to buck that trend. They work under a revenue-sharing model, which means they’re incentivised to reduce costs to attract more clients.
In addition, legal consultants provide better return on investment due to the nature of the business model. Their earnings are tied to the success of client relationship, which naturally results in more time spent with clients. And the fixed-fee approach adopted by legal consultants minimises the risk of double-billing and incentivises swifter solutions.
‘You get direct access to an expert in their field,’ said Mark Swann, an Excello Law client and contributor to the LexisNexis report, Rise of the legal consultants. ‘The price is more competitive because people are working remotely…And because of the way firms are structured, because we are a source of income, [legal consultants] care much more.’
Legal consultants also work for platform law firms, which can further reduce the costs through the business model and ethos. Consider, for example, the way platform firms reduce bureaucracy, avoid double-billing, embrace automation, find legal tech solutions, and adapt to remote and hybrid working– all of which reduce costs. Those cost reductions can be passed onto clients, which will work towards meeting the abovementioned unmet needs.
The centralised business model, sophisticated IT systems, efficient client capture, and strong marketing presence means that platform law firms can provide reduced rates and an improved service, which will help them meet the customers unmet needs over years to come.
Small firms need to adapt and grow to meet that customer need. The admin, bottlenecking, over-management, and other forms of bureaucracy are slowing lawyers down, increasing costs and passing those costs onto customers who are unable to meet them. Small firms need to learn lessons from platform law firms and change to meet the demands of the moment.
Small firms need to free up time so lawyers can focus on clients. They can adopt legal tools – such as Lexis®PSL and Lexis®Library – to help lawyers access quick and timely information. They could embrace automation to streamline tedious tasks – such as document automation, legal contract automation, payment collection, and billing – to give time back to lawyers.
Small firms should embrace flexibility, particularly around remote and hybrid working. The benefits of flexible working are clear. Reports suggest, for example, that hybrid and flexible working models improve employee wellbeing, ensure better staff retention, reduce costs, improve in-house collaboration, and broadly increase productivity. And, on top of all that, offering flexible working is essential for attracting the best talent and improving diversity.
Some small firms are already making such changes. Take family lawyer, Zoë Bloom, for example. Bloom explains in the LexisNexis report on platform law firms that the traditional legal career trajectory did not provide enough autonomy, so she switched to Keystone.
After 11 years in legal consultancy, however, Bloom decided that she wanted to set up her own practice. Bloom attempted to take the best aspects of platform law and apply them to BloomBudd LLP. ‘We want to offer straightforward legal advice, be transparent over fees and keep the team supported. We don’t have billing targets because they create a conflict…We don’t double charge by billing clients to train junior solicitors as well as pay for our time.’
Bloom demonstrates the changes small firms need to make to meet customer needs. They need to focus on clients, reduce admin and bureaucracy, embrace legal tech, and ensure that they provide the best possible value for money.
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