NewLaw firms are creating a wave of disruption in the legal industry. Often characterised by their points of difference to the traditional law firm, clients and lawyers alike are beginning to seek out NewLaw firms as a real alternative to the ‘old’ way of delivering legal services.
If you’re thinking of setting up a NewLaw firm, below are some tips to help you successfully establish your practice:
First and foremost, a NewLaw firm is client-centric in its approach. The following four tips all hinge on this one principle – that is, to truly put the client first in all of your decision-making and to ensure a level playing field between the firm and the client.
To be genuinely client-centric, all aspects of your business model should be justified by reference to the client. Ask yourself what benefit your client is getting from a particular action, and keep your clients at the forefront of your strategy.
Perhaps the key differentiator of a NewLaw firm is that it operates under an alternative pricing structure. Hourly rates are viewed by many clients and an increasing number of lawyers as a hindrance to trusted client relationships and a driver of inefficiency, and are being scrapped in favour of pricing structures that offer true transparency and certainty.
In order to implement alternative pricing structures, such as fixed fees or retainers, you must rewire your thinking and stop associating time with value. While time spent on legal work may be a factor in pricing your services, it is by no means the most important one, nor does it represent an accurate reflection of value to the client. Value-based pricing offers flexibility, allowing you to take into account all factors that might be relevant to a particular matter, such as:
- Complexity of the work
- Importance to the client
- Unique skills required to undertake the work
- Competition in the marketplace
- Cost of overheads
- The client’s budget
By its very nature, value-based pricing requires lawyers to carefully consider each client’s particular circumstances when pricing, which ensures that clients are not simply being offered a ‘set menu’.
The benefits of this pricing structure should not be understated – certainty in pricing has positive flow-on effects for the firm as a whole, including increased flexibility, seamless invoicing (no more dreaded “billing days”), fewer debtor issues and most importantly, better client relationships.
3. Internal culture
A natural follow-on from adopting an alternative pricing model is a happier workplace, unencumbered by internal budgets and time recording pressures.
A NewLaw firm allows its team the freedom to be productive without having to account for each six-minute unit of their day. This allows staff to put genuine effort into “non-billable” (but important) tasks which often stay at the bottom of the pile when working to billable targets, such as their own professional learning and development, marketing and client relationships.
Beyond this, a NewLaw firm fosters a culture of flexibility and puts complete trust in its team. With the various technologies available to businesses today, there’s no reason why staff cannot work remotely.
To encourage and nurture this culture, make sure you have appropriate IT systems in place (including virus protection) and consider how often you need ‘face-to-face’ time with your team. This will help both you and your team achieve a work/life balance in the absolute truest sense of the phrase.
4. Constantly innovate
Continuous innovation is the hallmark of a NewLaw firm. This term seems to be a buzzword at the moment, but really, NewLaw is simply a new way of thinking – whether that is as to how you price your services, how you drive efficiency within your firm or how you manage your team.
Technology and the competitive marketplace are incredibly fast-paced. Innovation doesn’t just apply to technology, but to your business model itself. It is about adapting to clients’ needs, and adapting quickly. In that sense, “disruption” is not a quick fix but an ongoing process.
To innovate, you need to challenge the norm and encourage innovation from your team members. How you do this will depend on your firm’s unique culture and style of thinking – that is, you will need to think creatively and be innovative to develop your own solution.
5. Be agile
The legal industry has lagged behind other industries in terms of disruption. This is starting to change as NewLaw firms are leading the way and demonstrating how the industry can adapt in order to compete.
As a NewLaw firm, it is essential to adopt an agile business model and to be flexible in your thinking. Traditionally, the first order of business of a start-up has been to come up with a comprehensive, lengthy business plan. The agile, creative approach is to replace the business plan with a ‘vision’. This vision can act as a guide for every business decision you make and your short-term and long-term goals, while not tying you down to a predetermined plan. As a result, your ‘business plan’ becomes necessarily agile in itself, allowing you to change your business model if you need to and introduce new ideas (to innovate).
The success of your NewLaw firm will ultimately be a combination of a few factors and will no doubt evolve in a way which suits your own individual style. Part of the appeal of NewLaw firms is that no two things will look the same, unlike the cookie-cutter style of traditional law firms. More importantly, establishing (and working in) a NewLaw firm provides flexibility and freedom that traditional firms simply do not, and because of how they are structured, cannot offer – so remember to enjoy the ride!
Marianne Marchesi is the founder and principal lawyer of Legalite, a NewLaw firm established in February 2017. Six months into trade, Marianne was shortlisted for the Lawyers Weekly Women in Law Awards in two categories, Sole Practitioner of the Year and Executive of the Year. In late 2017, Legalite was named ‘Best Law Firm (Business Clients - Australia)’ in the inaugural NAB Professional Services Awards, an award that was judged entirely by clients.