Is your firm one of “a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.” (Jonas Ridderstrale and Kjell Nordström, Funky Business).

One of the key challenges any law firm (and any business in general) faces is working out where to play. There are a number of approaches.

Diversification (AKA Straddling)

On the face of it, being able to act for clients on a wide range of matters has a lot of attraction. In theory this “diversification” strategy gives you more chance of getting work, because you might be able to address a larger range of issues that can come up for clients. However, while this shotgun approach may seem good for providing short term revenue, taking on any job that comes your way leads to an undifferentiated practice and lower long term profitability. Another description of this approach is “straddling” (trying to cover more than one position at the same time).

There are many problems with straddling:

• The fact that you are claiming to be (or even just perceived to be) all things to all people will reduce the chances that you will get the higher value top-end work you aspire to. Those jobs are unlikely to go to a “jack of all trades”. I recently introduced a lawyer to a potential client, as I thought he could help in some specific areas where he has real expertise. The client read the lawyer’s profile, which covered a wider range of other areas, and sceptically inquired “Is there anything they can’t do?”

• Many in-house legal teams are more than capable of covering many of the more general issues.

• To develop and maintain the skills to be able to do a wide range of work is time consuming, and stops you from doing more productive and valuable focussed activities.

• It’s very hard to build a profile and get cut-through when you are straddling. As a banking AND corporate lawyer I spent a substantial amount of time reading cases and articles across both areas just to keep up, rather than building deep knowledge, relationships and a leadership position in either one.

• The challenges of standing out will only increase as more clients do research on the internet. The chances of beating more focused competitors onto the first page of Google with a generic approach are zero, and if you are not on the first page of Google, you will not be seen.

• You are unlikely to do as good a job as you could with more specialisation. This will impact on your own levels of confidence and satisfaction with your work and client retention, as the reality is that others with more specialisation are likely to do a better job than you will, for better value.

Some form of specialisation and differentiation is going to become essential for even the smallest firms. Continuing to work in an undifferentiated way will not be an option. Others with more focussed businesses (which could include non-lawyers such as accountants, banks, insurers and trustee companies who decide to “go hard” with focus at certain areas) will start picking off work relevant to them, while the most general work will become available online for clients to do themselves, or use non-lawyers like Contract Check or recently launched CODR to help them. Richard Susskind in “Tomorrow’s Lawyers” has gone as far as to say he sees little future for most small general firms in liberalised regimes.

Competitive advantage comes from doing things differently or doing different things. There are a couple of key ways you can approach this:

• Technical specialisation

• Client focussed specialisation

Technical Specialisation

One of the key alternatives – and the one most lawyers are initially attracted to because it is more aligned to them and their existing strengths - is to focus on an area of technical legal specialisation. That way, if anyone has the right kind of legal issue, they can come to you, whether they are a usual client of yours or not.

While it appears attractive, there are a number of challenges with this approach:

• Clients don’t think about life in terms of your technical specialisations. It’s very hard to get their attention because the issues you want to differentiate on are not the things that are keeping them awake at night (or that they are even thinking about).

• A lot of the “technical” legal updates that law firms publish, dissecting the latest Supreme Court decision, will not be generating any return on investment, because they are not read and even if they are, clients can’t tell if it is any better or worse than the same updates they see from similar firms. They are too technical and not practical enough.

• These technical skill advantages are perhaps the most at risk of being attacked through artificial intelligence and other technology. The amount of information you hold in your head will become increasingly less important as new systems are developed to make that information more freely available to anyone. What will matter is how you can apply it in ways that are valuable to the client.

Client focussed specialisation is a better approach

This suggests a different type of focus – one which is focussed on your clients. Really learning about them, and their issues and opportunities, and understanding what is valuable to them and how you can help them.

This could still be across a relatively wide range of technical areas because the value you can add is in helping to understand and apply the law, not remembering it. If you need more technical expertise, there are (or will be) systems than can help, or other experts you can draft in from within or outside the firm. LawHawk is intended to be one of those systems, enabling lawyers to use advanced document automation to draft a wide range of high quality New Zealand legal documents quickly, so they can spend more time and focus on areas where they can add more value. There will be many other tools you can apply across a range of areas.

Focus can be one to one, or one to many

If you have the opportunity to work with a large corporate or Government client that will provide you with substantial fees, then you have the opportunity to really drill down on them and their particular circumstances, to become their “trusted advisor”. If you can get “inside the tent”, you can help with risk identification, planning and strategy, not just last minute implementation, or tidying up issues after they have arisen. There may be opportunities to agree different work and pricing arrangements based around retainers and/or the value you are creating. The happiest lawyers I know have these types of relationships. These gigs are hard to get, and harder to maintain because it can be easy to get distracted by shiny new opportunities.

In relation to smaller clients, it’s less economic to understand each individual client to that level but you can still use this approach. This is where “client personas” come in. If you really understand the sector, and have done your research, you will know the key characteristics of clients in that sector, and the types of issues or concerns they have. For more on how to develop personas, see this free guide from Hubspot.

Having clear personas will be enough to:

• Work out who your ideal clients are likely to be, where you can find them and how they can find you

• Allow you to create really great targeted content (newsletters, blogs, videos etc.) which those ideal clients will recognise as relevant to them, even if they are not completely personalised; and

• Help you do a great job when they instruct you, building off the base you already have and then spending more time tailoring and customising to their particular circumstances.

Note – under this client focussed approach you really have to understand the client and their context. It’s more than just the legal issues that affect the sector, but what really matters to the client. In a business sense, what are the key risks and opportunities and what drives business success? You’ll need to build a broader set of skills and relationships, and it will be hard work. However, it is that level of understanding, built up over years, which will make it so hard for others to replicate or replace with technology. That is the way to protect against being replaced by in-house lawyers, accountants or a robot.

Don’t limit yourself to where you live

You can also use technology to build a national (or international) practice in this way. The internet is a huge enabler. Your blogs, newsletters and videos can be shared and read anywhere, and if you publish regularly each item of content could still be generating leads in years. It is as easy as anything now to do a video call or a webinar instead of travelling for a face to face meeting or seminar. I have just been approached by someone in Europe who wants to know more about LawHawk.

If this is resonating with you, I recommend you read Michael Port’s Book Book Yourself Solid: The Fastest, Easiest, and Most Reliable System for Getting More Clients Than You Can Handle Even if You Hate Marketing and Selling.   It even comes in an illustrated version, but be warned –it’s not a book that you can read, agree with without really thinking too hard – and then do nothing. It contains a very structured approach including questions and planning so that by the end of the book you should have a much clearer plan for how you are going to create a focussed practice doing work that you really enjoy and are good at. Although I only read this book after deciding to leave private practice, I found it really useful to see some areas where I had taken the wrong path and to work out how it could be done differently.

Conclusion

While Susskind and many others are pessimistic for small firms, given that the same quality of technology and legal resources are now available to the small firms as to the big firms, I am much more optimistic about smaller firms’ chances for future success, as long as they are agile and nimble, and take advantage of their ability to more easily change the way they work to really focus in on a particular area where they can build competitive advantage by doing different things, or doing things differently.

Register here to create a free LawHawk account, and see how our system could help your firm strengthen its ability to specialise.