SME Law Firms – Market Assessment Chris Jeffery – Head of SME Law Firms, Thomson Reuters Legal Solutions Colin Kennedy – Chief Operating Officer, Thomson Reuters Elite
Thomson Reuters http://legalsolutions.thomsonreuters.co.uk
Market Assessment Survey • 668 SME Law Firms – Operations Directors, Practice Managers, CEO, CFO, Managing Partner etc. – April 2014 • Presentation at LSN Legal Practice Management Conference – May 2014 • White Paper – Summer 2014
Market Assessment - Respondents Size of Firm (fee earners) 60% 50% 40% 30% 20% 10% 0% 1 2-10 11-20 21-50 51-100 Nature of Firm 50% 40% 30% 20% 10% 0% Full Service Business Clients One Practice Area only Focus
Market Assessment - Respondents Size of Firm (fee earners) 60% 50% 40% 30% 20% 10% 0% 1 2-10 11-20 21-50 51-100 Nature of Firm Practice Area Focus 50% Personal Injury 40% 30% Prison Litigation 20% Law/Criminal Defence 10% 0% Full Service Business Clients One Practice Area Immigration only Focus
2014-15 Market Sentiment • 75% predicting revenue growth for this year – Half of those predicting growth forecasting an increase of 5-10% • No discernible pattern between size and/or practice area • Just over 10% of firms predicting a fall in revenue • Generally positive revenue forecasts
2014-15 Priorities Average % Most important % ‘Top 3’ Please rank the following themes in order of importance to the firm ranking Delivering a consistent level of client service across the firm 2.2 30% 62% Ensuring work is completed as efficiently as possible by the right level of expertise 2.6 10% 62% Winning new clients 2.7 20% 44% Retaining key members of staff 3.8 10% 35% Cross selling additional services to existing clients 5.3 5% 26% Reducing lockup (length of time it takes to recover fees from the start of a matter) 5.7 5% 9% Maximising margin in an alternative fee structure environment 6.1 10% 18% Staying on top of requirements relating to COLP/COFA 6.3 5% 26% Demonstrating risk management to support Professional Indemnity Insurance applications 6.4 5% 18% Finding a merger partner 9.7 0% 0% • Winning new clients takes priority over cross-selling to existing clients. • Merger fever calmed down? • Consistency in approach and efficient service delivery key. • ‘Other’ priority – Improvement of IT system (only firms 51+) • One firm had a strategic aim to go paperless
2014-15 Priorities Average % Most important % ‘Top 3’ Please rank the following themes in order of importance to the firm ranking Delivering a consistent level of client service across the firm 2.2 30% 62% Ensuring work is completed as efficiently as possible by the right level of expertise 2.6 10% 62% Service delivery Client/customer Winning new clients 2.7 20% 44% facing Retaining key members of staff 3.8 10% 35% Cross selling additional services to existing clients 5.3 5% 26% Internal Reducing lockup (length of time it takes to recover fees from the start of a matter) 5.7 5% 9% policies & procedures Maximising margin in an alternative fee structure environment 6.1 10% 18% Staying on top of requirements relating to COLP/COFA 6.3 5% 26% Demonstrating risk management to support Professional Indemnity Insurance applications 6.4 5% 18% Finding a merger partner 9.7 0% 0% • Winning new clients takes priority over cross-selling to existing clients. • Merger fever calmed down? • Consistency in approach and efficient service delivery key. • ‘Other’ priority – Improvement of IT system (only firms 51+) • One firm had a strategic aim to go paperless
Service Delivery – Client Satisfaction What initiatives has the firm put in place regarding client satisfaction? % Post matter reviews with client 67% Flexible pricing options 56% Map legal processes to ensure work is carried out as efficiently as possible 33% Service level agreements 12% Expand practice areas to deliver broader service 10% Mystery shopping 0% Elements of online self service 0% No initiatives 3% • Wish list split evenly between mapping of legal processes, service level agreements, expanding practice areas and elements of online self service. • Firms with no initiatives were categorised as having a focus on one practice area. All are forecasting revenue growth.
Service Delivery – Client/Customer Contact Thinking of the firm’s three most important clients, who within the firm maintains a regular relationship (aside from carrying out legal work and associated administration e.g. invoicing) with each of those clients? • Nearly 80% of firms have multiple individuals maintaining relationships with key clients. • Those relationships that have a single point of contact are all maintained by an individual partner. – Succession planning & staff retention – Importance of an effective practice management system • Only 20% of firms have marketing/business development professionals acting as a point of contact.
Service Delivery – Business Development What business development initiatives does the firm have in place? % Firm website 96% Social media strategy 78% Referral network 78% Client training and/or events 67% Regular client communication 55% Data capture and lead generation on the firm's website 46% Participation in local associations 42% Articles in trade/industry magazines 30% Articles on consumer legal information sites 12% Partnership with other professional services 10% Radio/television advertising 0% Pay per click advertising 0% • Firm website is almost a prerequisite • Looking to work out how to get more from online presence (social media strategy, data capture and lead generation) • What provides the greatest return? • Have these activities changed? 40% of legal ‘issues’ are not handled by a solicitor – Law Society Report 2012.
Internal - Budgets What % of the firm’s annual turnover is spent on the Average % Range following? Staff 39% 22-60% Rent/Property Costs 10% 6-15% IT/Telcoms 3% 1-7% Productivity Software (Practice Management, Case Management, 1.6% 0-4% Workflow etc.) Library, research & know-how materials 1.6% 0.5-2% Professional Indemnity Insurance 2.8% 0.5-10% Marketing/business development 2% 1-4% • Large range related to professional indemnity insurance. No correlation between firm size and % spend. • Those with highest proportion of turnover spent on staff are firms focussed on a single practice area.
Law firm Networks • 10% of firms have considered being part of a law firm collective/network. • Similar number of respondents already part of a network. If not already a member of a network, please rank the following considerations in order of Average % Most % ‘Top 3’ importance (6 of 8 potential respondents) ranking important Retention of the firm's existing name and brand 1.6 35% 75% Client leads 2.2 21% 60% Provision of professional indemnity insurance 2.8 10% 45% Integrated IT solution taking care of practice, case, matter and client relationship 3.6 12% 45% management as well as workflow tools Network brand awareness and advertising 5.6 0% 15% Provision of a website with Search Engine Optimisation and data capture 5.8 12% 15% Access to library, research and know-how materials 5.8 0% 15% Exclusivity within a certain geographic area 6.2 10% 15% Provision of IT hardware and telecoms services 6.2 0% 15% Stationery supplies 8.4 0% 0%
Next Steps Chris Jeffery – chris.jeffery@thomsonreuters.com Colin Kennedy colin.kennedy@thomsonreuters.com Creating the next generation of services for the legal industry.
Thomson Reuters http://legalsolutions.thomsonreuters.co.uk
Recommend
More recommend
