Lawyers must summon their entrepreneurial spirit

We now have accountants offering probate, IFAs employing solicitors and buying law firms, and a significant investment from private equity into processed legal services. Will there always be a place for the well-run, local solicitor practices that genuinely provide great service? Such firms will have to compete with the new entrants, and without significant investment, they will not win in any price war.

The really progressive independent firms are investing in new skills heavily, by creating business development teams and initial call-handling teams, for example. The cost of acquiring a new instruction is high and once that potential client telephones or visits your office, a specialist should deal with their enquiry – it should
not be left to a receptionist to give out a price.

How many times will the phone ring with an enquiry about the cost of a service? Unless we are able to compare services with our competitors, our conversion rate will be unacceptable. Every firm should have unique selling points and ensure that they are delivered
for every new enquiry.

Sales training and sales professionals are essential.
These skills can be outsourced
as necessary if you cannot afford them at the moment. Vastly improving your conversion ratio and knowing why you are not instructed are an essential part
of your future strategy.

Alternative solution

As new competitors provide
legal services, how do you raise the capital required to compete? That’s where the ABS model could work. ABS is not just about consumers, in particular those trying to break into the business market where legal services are not seen as a distressed purchase but an essential part of running
a business.

Once you have defined your services or specialisation, raising the necessary capital will be your key challenge. A well-written
and presented business plan outlining your objectives and cash requirements will be essential – as all other businesses have been doing.

Just being a solicitors practice will not be good enough for
the funders in the future. ABSs are a real threat with their significant financial resources, large advertising budgets
and marketing muscle.

The entrepreneurial solicitor should stop seeing fellow high-street practices as competition and work more closely together against the
new entrants. Building a strong regional law firm will mean mergers and consolidation
but that is the only way you
can compete.

Planning a new ABS model in conjunction with other local professional businesses is an option for some: gaining access to capital by working more closely with local IFAs, estate agents and accountants will be the route for a number of firms.

Own goals

Although many solicitors are seeing reduced turnover and profitability, they continue to practice in their traditional way. Those who do not adapt will score an own goal by remaining in the ‘we are professionals and not business people’ mode.

Over 15 years ago, there was the first sign of solicitors sharing fees with non-lawyers with the concept of multidisciplinary practices (MDPs), yet many failed to see the significance of the opportunity. In fact, it’s accountants, spotting the link between tax work and probate, that have applied for ABS status.

While there will always be a place for a well-run traditional solicitors practice, we must be aware of the new entrants and the changing market. Solicitors who are prepared to look for new opportunities will surely reap
the benefits.

SJ

Viv Williams is CEO of 360 Legal Group