29. What Does the Future Hold for Mid-Market Law Firms?
Mid-Market Series Part 4 Our long-term strategy for Mid-Market firms is you do you, and you'll be fine. As we say in Lean Adviser, look up and out not down and in. Specialize in your clients, use your talent and creative chops to solve their problems. Be efficient and effective, and the rest will take care of itself.
April 26, 2024 at 08:36 AM
3 minute read
The original version of this story was published on Lean Adviser
Welcome along to the fourth and final part of our mini-series on Mid-Market law firms. We opened with a view from the client's standpoint. Then we asked what happens when Big Law comes to regional towns, and then we turned to you, the attorney, and asked what kind of firm will be better for you?
In this wrap-up lesson, we horizon gaze and ask what the future holds for Mid-Market firms. Will there even be a Mid-Market? And if so, will the firms in it be the same, bigger, more niche or some other profile?
What we can say for sure is that Big Law will get bigger, both organically and through mergers and mega-mergers. But then what? According to one theory, Big Law and ALSPs will converge with new strategic alliances, as a solution to the tech-averse nature of many Big Law firms. (See, Law Firms and ALSPs Share the Same Destiny.) If that happens, where will this leave Mid-Market?
Let's go back a step and revisit what Mid-Market can do so well. If Big Law gets bigger, they will take on more clients and broaden their role within such clients. But this won't be all clients, and certainly not all Mid-Market clients. Big Law will charge even bigger. Rate differentials are already a factor, and as long as Mid-Market firms have lower administrative overheads and attorney comp, this will persist.
Likewise, and more importantly, client service. Here lies a key competitive advantage. As we have discussed, lean law is an easy fit within Mid-Market firms, which often have close personal and community ties with clients. They are more flexible, more agile and — critically — more willing to invest in understanding the client. This is a difference maker, and Mid-Market firms get it.
Much of this will be non-billable work. Clients are happy to see it happen, but they won't pay for it. To Big Law, that's a problem and a discussion. To Mid-Market, it's just playing the long game.
For precisely the same reason, Mid-Market firms are a better malpractice risk for insurers. As reported in "Legal Malpractice Claims Are Growing in Severity. How Can Midsize Firms Protect Themselves?," malpractice claims are increasing in severity and insurance costs are surging in tandem, particularly for firms with high-risk profiles. Mid-Market firms are well placed to avoid being in that group, because better client centricity means closer alignment on scope, planning and execution, which means less dissatisfied clients and less claims. Lean law is safe law.
Lastly, money. Clients are cash poor. Just as their problems multiply, so their legal budgets shrink. Is it any surprise that old loyalties aren't what they were? Sure, for big-ticket matters no GC ever got fired for hiring Big Law. But for the rest, clients are more open to bringing in a new firm than they ever were.
Our long-term strategy for Mid-Market firms is you do you, and you'll be fine. As we say in Lean Adviser, look up and out not down and in. Specialize in your clients, use your talent and creative chops to solve their problems. Be efficient and effective, and the rest will take care of itself.
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