Legal and professional services is being impacted by creativity and innovation, writes Belinda Coniglio.
By Belinda Coniglio
Tom Goodwin recently captured the global transformation of business, noting that the world’s largest taxi company, Uber, owns no vehicles; the world’s most popular media owner, Facebook, creates no content; the most valuable retailer in history, Alibaba owns no inventory and the world’s largest accommodation provider, Airbnb owns no property. “Something interesting is [certainly] happening.” (Goodwin). Legal and professional services also are being impacted by this global trend.
As creativity and innovation drive new enterprise, in a world where anyone with an idea can be an entrepreneur: lawyers, their firms and the provision of legal services face transformation or stagnation. An awakening is necessary for firms to keep pace with business today.
Despite the increase in insolvency and litigation matters during the GFC, financial pressure saw firms down-size and a few years later, undergo a spate of mergers and acquisitions that globalised the profession and included cost cutting measures that streamlined corporate functions and outsourced administrative roles (for example, secretarial pools based in countries with lower labour costs.
Since 2010, Australia’s small and mid-tier firms have been competing for market share with large international law firms. mall to mid-tier law firms face diminished revenue, difficulty retaining junior lawyers and rigid workplace design. These factors combined with the oversupply of law graduates have left the industry desperately searching for new growth strategies.
Perplexed senior partners clearly need to embrace the changing commercial world and target start-ups and entrepreneurs that could be the next Uber, Airbnb or Facebook. These prospective new clients represent an untapped practice area. Entrepreneurship is driving economic growth a trend prevalent in the United States and closely followed by Australia, which is seeing entrepreneurship swiftly redefine wealth and leadership.
While free-thinking and vision may ignite creation like oil on a fire in the early stage of business, a cautious balance between flaring and tempering the blaze to avoid a scorched terrain or smothered flame, many entrepreneurs prefer to outsource technical or regulatory requirements to remain focused on the big picture.
The start-up client (at least in the early years) demands a flexible and affordable legal service that includes prudent business advice. Lawyers who want to engage with the commercially and tech savvy entrepreneur, will have to change their professional image and business model. Gone are the days of the wig and robe as well as slick lawyers with innovation stifled by their six minute billing systems often referred to as the “vein” of a firms existence. There is a fine line between the accountability and productivity that billing brings to the profession and questionable ethics to achieve billable targets.
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Start-ups demand a new type of legal service that offers packaged services that could include a suite of precedents and practical advice across business law areas from intellectual property, to ecommerce and employment law. This empowers the client with knowledge and an inexpensive alternative to traditional legal services when establishing the rudimentary corporate and operational areas of their organisation. Law is not a last resort, it can a preventative measure that provides business with practical tools and strategies that avoid litigation.
The Australian government’s recent tax concessions to start ups acknowledges that innovation is driving our economy and will reshape the law and legal practice. To succeed, legal practitioners will need to understand their clients and make access to legal services affordable. As a start-up grows, so too does the relationship with the lawyer or firm who becomes an integrated part of the business, similar to the accountant, who has taken significant market share in relation to tax and corporate law advice.
This is not to suggest that lawyers become business consultants/analysts or imply that there is no place for the high level legal skill required for technical matters. It simply recognises the need for law firms to deliver and bill legal advice in a more cost effective, practical way, providing more options and solutions for clients.
Lawyers will also benefit from working with entrepreneurs and start-ups, a culture in which everything is possible. Fusing creative strategic and analytical minds will encourage innovation and leadership within the legal profession to generate value, good will and increased market share and revenue for firms and clients.
As part of their growth strategy, small to mid-tier law firms need to improve their marketing, particularly through social media in order to engage with the entrepreneurial community. This is one area that lawyers can also learn from start-ups. Even large firms, who have (often largely resourced) centralised marketing and communications teams are out of touch using with impactful marketing strategies, especially social media. Social media engagement is important on two levels – to build the firm’s brand (attracting new clients) and lawyer’s personal branding to build thought leadership in the profession. And of course, as Jiwa writes, marketing is less about persuasion and more about understanding your client.
Law firms need to change their image if they are to identify and connect with start-ups and entrepreneurs, their emerging new client base and practice area to survive. Leadership from small to mid tier firms can tap into the market demand for flexible, affordable legal services that the start up space demands by changing the traditional firm billing model and by offering dynamic, practical options that demonstrate an understanding of their client - an emerging new business class that is no longer dominated by white, middle-aged man wearing a designer European suit.
Title inspired by Jen Curcio.
