Law Firms: Time for a New Focus on Market Differentiation
How does a law firm distinguish its brand when most large firms offer comparable services? This has become a critical question for national and international firms looking to achieve profitability and attract top-tier lateral talent in a competitive market.
The short answer is that all law firms have strengths and assets that are wholly unique to their organizations. Differentiators just need to be pulled from the ethos. Many firms find their differentiators to be both surprising and dramatic. I’ve been watching law firms engage in soul-searching analyses of their businesses as they work to distinguish their brands and plot their futures. It’s a defining initiative every growth-minded firm should pursue.
Once you perform this analysis, the next big question becomes – will you act on it?
A prosperous future demands that you act on your strengths
An astute observation in the LexisNexis Business of Law Blog gets to the heart of the growth challenge for law firms and the need to focus on market differentiation. In 41 Legal Industry Predictions for 2016, Janet Stanton, partner with consulting firm Adam Smith, Esq. said, “Many firms continue to suffer from excess capacity and are often indistinguishable from each other. The high-performing firms will continue to pull away from the pack because they ‘know who they are’ and have compelling strategies. Firms who assess their situation in a clear-eyed fashion with the intestinal fortitude to make significant changes can survive – heck – even thrive.”
These takeaways are very relevant to large firms:
- Many firms are indistinguishable from each other
- High-performing firms know who they are and have compelling strategies
- Firms need to assess their situation and embrace change
What kind of change does differentiation require?
As a legal industry recruiter, I work with many law firms that are refining their strategies. Some struggle in deciding which areas of practice to brand and promote. Others are concerned about alienating certain groups of lawyers by focusing most heavily on more profitable areas.
The truth is that marketing your strengths doesn’t mean letting go of lesser-performing areas of practice. It does mean looking intently at the core clients you currently serve, the types of clients and industries you want to serve in the future (i.e., the ones who present the most potential for growth and profit), and how you will brand your firm internally and externally to bring those plans to fruition.
The best talent gravitates to strong brands
The way your firm stands out in the market is extremely relevant to recruiting. I spend each day brokering relationships between law firms and lateral associate and partner candidates. Generally, top-tier attorneys will not consider a new opportunity with a firm perceived to be too similar to the lawyer’s current firm.
Candidates are most interested in talking with law firms who can say, “This is how our platform and culture are different. These are the areas in which we excel, these are the reasons why, and this is our strategy for solid future growth.”
Law firms that successfully navigate the intensely thoughtful, sometimes painful, but necessary transition to market differentiation will attract the best talent and ultimately be in position to stay relevant on the market for years to come.
Michael Lyles is a former prosecutor and criminal defense attorney, and spent time as a law school career counselor at Cardozo Law School in New York.