The legal profession is under tremendous pressure these days. Lawyers have to stay all-set for the ever-increasing challenges in this hostile environment. One should stay updated with the changing market trends and client preferences that majorly hamper the business growth of the legal firms. In addition to these crucial factors, digital revolution across every sector is also imposing challenges on the legal firms.
Now, what to do in such a scenario? Well, according to Thomas Reuters recently released survey in their State of US Small Law Firms Study report, they polled 300 solos and small law firms and asked them to common challenges that come their way while implementing successful legal practices.
From which, we took top 5 challenges that hamper the overall efficiency of law firms. Let’s take a look at them:
1. Difficulty in acquiring new client
According to the survey, 78% of law firms find difficulty when it comes to acquiring new clients as predicting client’s preferences is tough. Why? Many law firms fail to market their business correctly in the agile market.
They don’t put their efforts in the right direction, i.e., to the specific needs of the potential client at every segment of the process; you have to plan how and when to participate, support and convert your clients to enhance your law firm’s reputation in the market.
Making use of effective marketing technique can help you double your law firm’s profits. Some of the methods include:
- Industry-specific call to action
- Link building
- Attending seminars and events
- Conducting referral programs
- Explore social media
2. Excessive administrative burden
Being a law firm business owner, you have to play many roles like a manager, decision maker, client executive, administrator, etc. But don’t let this work burden drain you. 69% of law firms spend too much time on administrative tasks and if you find yourself in this ratio- take a step forward now.
You can hire a team for administrative work, and if it is costly, you can opt for legal support services. Legal service providers offer affordable legal support services that will allow you to focus only on core business aspects.
3. Fail to keep up with the increasing complexities of technology
63% of law firms report that keeping up with the evolving technology has become a daunting task. However, the core motive of technology is- “To ease the lives of humans,” but at some point law firms find operating these tools quite challenging as they lack skills.
Learning about new technologies like AI application, different tools and software will surely help you stand out of the market competition like a winner. You can focus on cases that need quick resolution rather than doing legal research and writing, document review, contract management, etc., as the tools will do everything for you. AI applications are better than humans, they think and act like a human being and can continuously work without sleeping.
4. Obstacles in controlling overall cost
Controlling overall cost is the most challenging task- agreed by 62% of law firms. Why? Planning finances strategically are vital in every business industry, and the legal sector is not excluded from this phenomenon. Overspending in marketing, or tools, improper follow-up with clients, complicated mode of payment, etc., all these factors increases expenses of law firms.
You need to plan your finances smartly and keep a check on the financial position of your firm every year. Make an adequate budget for your firm and adhere to it strictly. Following are some smart budgeting tips that can help you survive through financial ups and downs:
- Overrating expenses, undervaluing income
- Consider seasonal fluctuations
- Expect the least expected
- Keep a hawk on your cash flow management
- Review the budget on a monthly basis
- Purchase accounting software for better accuracy
5. Pressurised to reduce costs
You might have served some of your clients successfully, and they always approach you for any legal issue. It is obvious you don’t want to lose such clients and every time you strive hard to deliver better services. What if someday they say “Kindly, charge us less, we are your loyal clients”? This is a very considerate situation as lawyers don’t want to destroy their client base and reputation in the market. 62% of law firms face this circumstance and often find it challenging.
What you can do is- you can offer some discounts to your loyal clients and organize referral programs for your clients. This will benefit you both!
Every New Year will pose new challenges on law firms and keeping clients happy in such conditions isn’t easy. Making smarter moves against obstacles will actually reveal your inner abilities. Stay consistent with the market trends, work hard and excel in the dynamic market!