Differentiating factors between successful and non-successful firms

Differentiating factors between successful and non-successful firms

A new decade is upon us and firm leaders are attempting to identify what strategies will give them a competitive advantage and sustained success going forward. Legal consumers today want it their way and the most successful law firms are realizing they need to comply in order to compete. As small law firms everywhere push to become more client centric how can you use insights from successful firms to direct your growth in the coming decade?

 

Enter the Thomson Reuters 2019 State of Small Law Canada Survey. In this survey, over 200 law firms with between one and ten attorneys were asked to say whether they thought of their practice as “very successful, successful, neither successful or unsuccessful, or not successful.” Then, they answered a variety of questions pertaining to the management of their practice. The State of Small Law Canada report, derived from the most recent survey findings, highlights key differences in behaviors of successful and non-successful law firms.

 

Successful law firms practice law

 

One of the most obvious differentiators of success is the amount of time practicing law compared to time spent on administrative and other business tasks. Firms that self-identified as successful were seen to have more time to give to their law practice and were not burdened by non-legal activities. On average, very successful firms spent 62% of their time practicing law while unsuccessful firms practiced law for only 50% of their working hours. That 12% is likely gained as a result of effective best practices that make non-practice related tasks more efficient and less stressful. These best practices could be as simple as adopting easy-to-use software to streamline administrative duties or creating action plans for potential obstacles within the firm.

 

Implementation motives

 

The 2019 State of Small Law Canada survey showed a noticeable difference in how successful and unsuccessful firms were motivated to implement changes. At the base level, successful firms were more likely to be working to improve the quality of their practice as opposed to increasing profit. On the contrary, among firms deemed “neither successful or unsuccessful,” or “not successful,” cost reduction was the most common motive for change. However, successful firms strived to improve client satisfaction. Successful firms back this up with the data they use to track success as they are more likely to track factors like work/life balance and repeat business.

 

How successful firms measure success

 

The legal industry is rapidly changing, and clients are beginning to expect more from their attorney. Without exceptional client service, law firms are becoming unable to attract quality business and sustain success. When asked what their primary measure of success as related to the firm, responses from successful and not successful firms were more drastically different than any other category. Very successful firms listed client satisfaction ratings as their primary measure of success 43% of the time and listed overall profits in 14% of responses, while non-successful firms listed client satisfaction ratings 3 percent and overall profits 47% of the time.  This combined with evidence that very successful firms were almost twice as likely to measure client satisfaction shows the influence that prioritizing client satisfaction can have.

 

Measuring client satisfaction

 

Being transparent, communicating effectively, and establishing a good relationship with your clients are all great ways to improve their experience and raise satisfaction. Firms can easily measure the results of these types of actions by sending short surveys out periodically or after a case, but consistent client experience is much more complex than a simple survey. Ensuring prioritization of satisfaction levels as a measure of success engrains the importance of your clients into the culture and values of your firm. Attorneys are used to relying on data to determine the success of their firm, but measuring non-traditional performance indicators, such as client satisfaction, is an additional factor that has become a best practice for any firm looking for long-term success. By enhancing both client experience and the measurement of satisfaction with that experience, your firm will separate itself from the pack and be positioned to succeed in the new decade.

 

Learn more about characteristics of successful firms and overcoming business challenges by downloading our white paper, The Winning Approach.

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