UK Law Firms “Fail to Plan”
09 November 2012
Despite the legal profession facing the most challenging times in its 300 year history, UK law firms are still failing to plan strategically, according to a survey from The 360 Legal Group, which helps law firms with marketing, management and business strategy. The survey said that seven of 10 UK law firms do not have a strategic plan that they review on at least an annual basis.
The survey also indicated that while six of 10 firms are planning to grow their businesses by acquisition and/or merger and a third are planning to reshape their businesses by focusing on more profitable business, one in five firms are still failing to plan any form of strategic initiative to carry them through the uncharted territory of The Legal Services Act. The survey was undertaken between January and May of this year with 188 law firms, from sole practitioners to firms with 200-plus employees participating.
Six in ten law firms surveyed fear domination in the next 12 months by a few large legal firms as the result of consolidation or by other large commercial organisations such as supermarkets or banks.
One in five cite increasing pressure from financial providers as being their biggest management challenge, whilst around a third say the need to drive business growth through more focused and aggressive marketing efforts is causing them concern.
Just four per cent of respondents believe their firms are aggressively marketing their services at present and less than half (49%) say that they are even actively marketing their services.
While 45% of firms say they plan to increase marketing activities in the next twelve months and 11% of these plan to greatly increase activities, less than one in five firms are employing professional marketing advice and almost half still rely on traditional paper-based marketing techniques such as leaflets.
Viv Williams, Managing Director of The 360 Legal Group comments: “Despite the converging impact of The Legal Services Act, the Woolf Reforms, the rise of the legal super-centre, referral fees, the death of the high street, legal aid reforms, franchise changes, graduated fees, the demise of the property market and the crunch on credit, which have all conspired to put law firms under the greatest threat thathas ever existed in an otherwise gentle 300 year history, a significant number are still failing to grasp the challenges and opportunities that face them,” said Viv Williams, managing director of The 360 Legal Group. “What this suggests is that a significant proportion of law firms, many with aging equity partners, are proving incapable of adapting their management techniques to run practices as businesses of the future.”
With the full implications of The Legal Services Act likely to be realised in 2011, bringing with it the opportunity for private equity funding, law firms should also now be considering planning and investing to correct their situation and give themselves a competitive advantage in attracting investment in the future, Williams said.
