The Trends Putting Pressure on Law Firms

Posted on February 27, 2018


An increase in major settlements for pro se litigants is not what we predict for this next year, but we do notice other important trends impacting your industry. Market consolidation, downward pricing pressure, and new technology are all having a significant impact. How is this directly impacting your firm, and how should you respond?

Consolidation of Firms

This is perhaps the most obvious trend. The industry is consolidating as larger firms move into lateral markets. Demand growth has been modest during the past several years, while volatility has significantly increased. According to a recent report, over 71% of firms failed to see two consecutive years of demand growth.* This means that fewer firms are realizing demand growth, and the majority of firms are seeing either flat or decreasing demand. The expectation is that large firms will continue to expand and put pressure on smaller firms. We encourage that you are not part of that 71%, and we’ll explain how, a bit later.

Downward Pricing Pressure

As the above trend continues to impact the industry, smaller firms are experiencing increased pricing pressure. Developing and managing an effective pricing model is already a challenge. Ensuring that your pricing model is competitive, however, is an entirely different matter. Today’s clients are demanding more for less. A recent infographic illustrates how only 28% of firms have addressed this issue, and 87% are experiencing intense price competition.** Bound by a finite amount of time, the laws of physics, and your limited resources, there is still a way to break free of this pressure.

New Technology

Long before artificial intelligence will possibly enable robots to take over the world, it will enable your competitors to take over your markets. Large firms have spent large sums of money to improve their efficiency and essentially do “more for less.” Small firms have been slow to adopt cloud-based technology, not to mention artificial intelligence (yes, many firms are now using artificial intelligence). Managing your cases, finances, and time effectively is increasingly important in a consolidating market. It can be difficult justifying the expenses of new technology, as you anticipate also having to manage it yourself (installation, updates, tech support).

Consider, now, the efficiencies your competitors are gaining. They are using technology to better manage case documents, client information, and client communications. This increases the amount of time they can spend meeting with new clients and improving their referral rates. Without a vast budget for technology, marketing, or additional headcount, how can you compete?

Smart Marketing

To drive top-line growth in this market, ensure that your brand is strong. Many firms engage in a “pro se marketing” approach, but the risks should be rather obvious if this is your sole marketing strategy. A company with many years of experience in marketing campaign planning, search-engine optimization, and media buying is more effective than a company without. Experience pays.

Additionally, a company that specializes in personal injury is more knowledgeable of the characteristics and consumer behavior of that unique market. When you combine that expertise with the experience of a marketing company, you will find that they are well positioned to take advantage of economies of scale and market to your target customers. Using the best marketing technologies, creating effective advertisements, and continual optimization enables them to lower marketing-overhead costs and improve the effectiveness of every campaign.

Firms often fail because of insufficient cash flow, and the risk is greater with increasing market pressures. Don’t overspend in an area of business that pulls you away from your expertise. Instead, focus on successfully settling cases and building strong client relationships.

RW Lynch has been successfully marketing to personal injury victims for over 33 years, helping member attorneys get more cases and strengthen their practice. This next year could be spent intensively settling cases, or instead spent on managing additional non-legal activities like in-house marketing programs and expenses. What does the next year look like for your firm?


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