The legal profession has been under pressure to reduce costs and increase efficiency for years -- and those pressures aren't just being felt by major white-shoe firms. Clients are increasingly scrutinizing small and mid-sized firms about their efficiency, project management and cost, according to a report by The Pittsburgh Post-Gazette.
In a buyer's market, many small and midsized firms are rising to the challenge -- and reaping the benefits of increased client satisfaction and retention. Here's how.
Show Me the Numbers!
Small and midsized firms are increasingly looking at hard data to guide their practice. While experienced practitioners can often give accurate ballpark estimates of the time and cost a client can expect to encounter in a particular matter, today's clients are often demanding more exacting assurances. That means looking past just anecdotal experience to objective data.
There are a variety of ways to get to that data. Internal tracking can be used to monitor the time and money spent on discrete tasks within the firm. But there are also plenty of outside sources of information, from consultants (see below) to "big data" startups. Some of these startups are collecting public data to predict case outcomes, lengths, and typical patterns.
Alternative Fee Arrangements
Partners might love it, but pretty much everyone else hates the billable hour, from new associates to clients. Clients are becoming more aggressive in demanding alternatives to the typical fee setup. Many corporate GCs now use a competitive bidding process to select outside representation. Sixty percent regularly ask for alternatives to billable hours.
It's not just large corporate clients that want these special deals, either. All clients are increasingly looking to squeeze more value out of their firms, in the form of alternative fee arrangements. These alternative arrangements include contingency fees, fixed-fee retainers, and even volume discounts for the busiest clients.
Bring in the Consultants
To meet client needs, firms are looking to outside help. Many small and mid-sized firms can't afford to have in-house data analysts tracking their every billable minute or marketing gurus setting up the best billing package for the client. (Of course, FindLaw's team can help with that!) Nonlawyer experts are increasingly being called in to examine a firm's data or institute best practices procedures for project and case management.
Of course, feeling the pressure to meet clients' needs is nothing new for small and mid-sized firms. Those who can deliver the greatest efficiency and most value for cost, using modern methods, will be best prepared to succeed in a market where clients are more willing than ever to shop around.