Here are my predictions for 2017 with innovation topping the 'must do' list of resolutions for law firms.
I recently spoke with medium business owners in Sydney, where I discussed my top predictions for the future of innovation in the legal profession. There are a range of areas that are critical for all law firms to consider to drive growth and business sustainability into 2017.
1. Diversity across a range of people and services will see those brave law firms take the lead in 2017.
The shared experienced of a diverse workforce environment out shines less diverse peers in most studies. These diverse firms also prove that they out perform their peers in market expansion and also more successfully enter new markets. These critical success factors will prove more enticing for those clients looking for a single point of contact in a more and more complex global market.
2. The cross-pollination of skilled professionals not necessarily from the Legal profession, leading and driving law firms will see a powerhouse of new opportunities come their way. These creative firms will continue to experiment with their ownership structures and it’s this success that will entice new sources of funding, but also great new relationships that will support a more customer centric approach.
Although this type of non-lawyer ownership is not currently allowed in the UK and Australia, it is inevitable that in time more flexible forms of ownership will become acceptable. Those firms that are able to embrace these progressive forms of ownership will open themselves up to greater opportunities, broader client bases and industries that they potentially would not have access to.
3. it is important that the future leadership of Law firms consider non-traditional forms of leadership. Gone are the days that top lawyers should run firms. Professional managers with a myriad of experiences and professional acumen may in fact be better suited to lead firms and keep an organisation focused on growth and new client development.
Talented traditional managers who spend too much time at a desk and not in-front of their clients can become stale and frustrated. Those with a talent for running businesses should be encouraged to do so, however it should not be an expected path for many Legal professionals. In many situations it would be better have strong people capable leaders driving the business forward and allow the skilled Legal professionals to continue to drive business growth.
4. The future of profit driven businesses could be coming to an end – its value for money that will drive new business, keep existing clients and spur firms to offer more for less.
I think the time is now for firms to offer innovative new models to support the changing face of their clients. There is no doubt that clients can be sensitive to complex pricing models however perceived value reduces the risk of clients looking for and finding those alternatives. No doubt the profitability of a firm is still top of mind for any business owner, however the focus on margins can be simplified and the focus can be re-directed onto the client, it’s this focus that will encourage the client to engage more and to avail themselves of more services.
Recent studies show that nearly 50% of Canadian firms utilise the services of outsourcing professionals, or LPO’s. One recent study shows innovative firms in Australia are increasingly embracing relationships with LPOs as an effective means of controlling costs, managing and scaling resources, and improving their overall service delivery. For the moment, Australian firms lag significantly behind their other Global cousins with on average less than 10% outsourcing. This is set to increase by 4% to 6% in 2017.
5. Technology Advancements – Artificial Intelligence (AI) will see significant disruption to the Legal industry.
By no means does this mean the end of the industry and the computers take over. It just means that how we leverage the information we have access to, how we engage with this tech and how we communicate the outcomes with our clients will change. It’s this type of disruption that will force traditional businesses to adapt rapidly or risk irrelevance.
One potential benefit will be the how firms spend more time servicing their clients and offering services beyond traditional Legal practices. It’s a new world and the tech is still in its infancy but as it grows and learns, the growth will become exponential, learning and building databases worldwide and allowing firms to potential do business in another country with limited local experience.
6. Data and network security continues to stretch organisations worldwide, the ever increasing risk of security breaches and client
data being exposed to criminal organisations is growing.
No doubt that through this risk we are seeing firms of all sizes implement a range of new local measures to protect themselves and their clients. Leveraging the size of some of the world’s leading cloud providers should be seen as a priority for many firms. It’s through this size that you will find the security scale necessary to protect your business. Examples of these firms are Amazon, Microsoft and Google. Although there are many Tier 1 firms and a plethora of Tier 2 and tier 3, firms need to consider who they are working with and what level of protection is being offered. Even outsourcing firms or LPO’s need to be able to provide or prove their network security and what is being done at a local level to protect their clients. Hoping that it won’t happen to you or relying on your local IT team to stay on top of Microsoft security updates is no longer acceptable. A proactive and strategised approach to security is the only way forward.
7. Outsourcing is still at the forefront of strategies to support the continued cost reduction and growth opportunities for the Legal Industry. 2017 will see continued significant pressures on Legal firms to deliver more for less, this is the world over. Outsourcing gives firms an advantage that they usually can’t get through their local labour opportunities. Outsourcing provides a competitive advantage that allows them access to specialised staff, opportunities to grow without significant cost increases, reduced recruiting costs, less on-boarding and management processes. Overall firms will invest less overall capital into outsourcing but gain and provide a more competitive landscape and deliver a more holistic, value driven experience to their clients.
8. Creative workspace and working environments – Collaboration across offices and countries will continue to drive client and staff working experiences. As our cities become more congested and clients look for better ways to engage with their preferred legal professional it will be essential that we provide options. Firms may engage with firms in other cities to provide complimentary services, they will need to consider if having their team spread more geographically in outer regions will allow for happier employees but also support growth through non-traditional client opportunities. Millennials will alter and change how we see workspaces forever. As cities grow and outlying regions are provided with better digital services, it is right to expect that our future employees might very well be video conferencing their clients off a phone or tablet from a day-care centre after dropping off their children. Or conducting a review or meeting from a café whilst planning a holiday. The balance between work and life is merging and as the doors of the world continue to open, digital tech will continue to drive opportunities and challenge traditional thinking of 9 to 5. Open plan work environments, collaboration centres and even sleeping pods allowing teams to merge both work and life in and out of the office. Technology will continue to drive change and leaders in today’s firms will need to consider the potential risk of losing their very best and talented to more innovative firms.
The future of Legal firms using LPO’s, Legal Processing Outsourcing industry is definitely on the rise. As firms realise that their competitive advantage is dwindling they will need to both adapt and rise to the challenge of growing and evolving. PBO Global is strongly positioned to support the needs of legal firms and their teams. Contact me to understand how.