The legal market is undergoing rapid change . Legal departments are no exception. For example, large corporations began streamlining their legal functions a few years ago.
The major clients, public actors and multinationals, contribute significantly to lawyers' income. Many firms specialize in this clientele or depend on it for a large part of their fees. The subject is therefore not only essential but sometimes decisive!
Rationalization of the Legal Department
The rationalization movement is linked to the increase in legal expenses, itself the consequence of increased internationalization and judicialization of activities. A relative trivialization of legal services should also be noted. Consequently, the Purchasing Department took an interest in this cost center and sought to take control of these “legal purchases” which are lawyer services.
This results in significant consequences on the expectations requested of the law firm: monitoring of costs, requirement for responsiveness, evaluation of the quality of service, reduction in the number of contacts, limitation of the intuitu personae, internationalization of suppliers, monitoring project live and in detail, etc.
This same Legal Department also equips itself with new means and new tools to supervise and manage its service providers: information systems, strategic consultants, in-house lawyers, etc. The following articles taken from Village de la Justice or LegaltechNews are some examples.
This development is not new. It is in fact part of a dynamic of centralization and optimization of work processes that has been at work in multinationals for decades, and which has gradually colonized each department of the company.
The consequence is nevertheless direct for law firms, service providers to legal departments. In addition, all firm structures are concerned, partner firms as well as large firms, IP/IT specialists as well as social law experts!
5 strategies for the law firm facing the Legal Department
To respond to the challenges posed by the legal department, the firm has several strategies, all relevant and sometimes cumulative:
Size strategy: “one stop shopping”
Merge with another firm, join a network or association of lawyers, participate in an international network, recruit new partners through an incentive policy, etc.
- making yourself indispensable to the client by handling all types of files, increasingly varied
- achieve productivity gains and economies of scale and thus recover financial margin or negotiation margin
- offer both high added value and more accessible services, in the interest of the customer
Specialization strategy: “the leader in its sector”
Strengthen your expertise, develop your skills, involve experts (even non-legal), develop your network of influence
- become essential in niche or differentiating sectors, or a geographical or sectoral area
- attract anyone with a question about your subject and convert them into customers
- develop real tools, analyses, content that bring related value to its customers
Pricing strategy: “effective”
Gain efficiency, be more productive, work in a network (including near and offshore through network access to less expensive skills)
- be favorite of all calls for tenders
- guarantee responsiveness and quality of work in its areas of expertise
- be identified as efficient, responsive, accessible, “entrepreneurial”
Service strategy: “the partner lawyer”
To offer a high-quality customer relationship (transparency, responsiveness, sharing, collaboration, etc.); to offer additional services (training, conferences, paralegal support, etc.)
- differentiate yourself through customer relations and added services
- enhance the customer experience and the comfort of the premium support offered by the firm
- increase its revenues by promoting these additional services
Innovation strategy: “the lawyer of the XNUMXst century”
Offer comparative advantages to your client and your firm using technology (blockchain, digital signature, etc.)
- provide the legal department with innovative and unique services
- promote the customer internally thanks to new tools
- stand out on the themes of innovation and technology
What strategy to implement?
This strategic thinking is vital to enable the firm to structure its development. However, none is better than another. As a partner of the firm, you will be more in tune or more motivated by one or the other.
Are you already recognized for strong expertise in a field? Expand your network, offer some first-level value to your contacts, work on your marketing and you will quickly grow your customer base!
Can't stand wasted time and disorganization? Invest in the work processes and internal organization of the firm and very quickly, a size or price strategy will be a relevant development axis.
Whatever your response to the change of your client, the legal department, your challenge is to define a clear strategy and, even more, to put it into execution.
How to transform your office?
To do this, you have to invest, in time and money, to transform the office.
Many tools are at your disposal:
- Open up the governance of the firm to integrate external firms or colleagues
- Review the partner remuneration mechanism to attract experts
- Improve the management of collaborators and employees to increase productivity
- Review the organization of legal production work and automate using software tools
- etc ...
We can only advise you to seek support in this strategic reflection which will lead you to profoundly transform your practices, your associates, your corporate culture.
Many independent players or agencies are competent on the subject and could usefully help you make this shift: Jérôme Frizzera-Mogli, Headcom, Hercule, Sachinka, Jurimanagement to name just a few.
A key question remains: are you ready for change and the risks it entails?