Legal Firm Survey: Top 5 challenges

By admin - April 5, 2018

Pitcher Partners recently conducted our fourth annual Legal Firm Survey. The survey was designed to gain further industry insight and to help firms make informed decisions during times of rapid change.

Download the full report here.

Attracting new clients remains the number one concern in a highly challenging legal market. However, it was pleasing that 73% of respondents grew fee revenue in 2017.

The top five challenges faced by respondents come as no surprise:

  1. Attracting new clients
  2. Attracting and retaining staff
  3. Clients seeking more competitive prices
  4. Market/economic conditions
  5. Succession

Survey respondents said the predominant source of new work came from existing client/contact referrals, followed closely by partner business development. Firms should consider online advertising channels as these remain a largely untapped marketing channel among commercial practices. In comparison to traditional marketing channels, online advertising is relatively low cost and allows small to medium firms to engage directly with an audience and potentially source new work. However, the most effective business development activities for professional services remain personal, namely referral relationships and networking.

Attracting and retaining staff continue to be among the top challenges among survey respondents. Competition for attracting and retaining high calibre staff intensifies as firms continue to lose staff to in-house legal teams, existing competitors and new market entrants. Staff retention policies need to be in place as high staff turnover rates will ultimately, and directly, affect a firm’s bottom line.

Clients are seeking more value and in response, law firms are adopting innovative billing alternatives. Despite the steady increase in alternative fee arrangements, traditional hourly rate billings still dominate how firms bill their clients. Firms should adapt to client expectations about how they want to be billed and consider offering contemporary and innovative fee arrangements such as fixed, success based, value based, subscription based, capped and staged/ milestone billing options. Firms appear to be aware of the challenges they face but unsure how to respond to those challenges. Firms need to ensure they are open and willing to accept change and get comfortable being uncomfortable.

Download the full report here.

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