New markets, larger footprint key to firm growth
Law firms across Australia and New Zealand are planning to expand their target markets and geographic footprint to try and win more business, according to a new research report.
Joint research conducted by the Australasian Legal Practice Management Association (ALPMA) and LexisNexis found that the biggest challenge for law firms of all sizes across Australia and New Zealand is finding new customers.
To overcome this challenge firms are looking at expanding their scope of clients, with 54 per cent of firms planning to increase the number of target markets they address and 44 per cent of firms planning to expand their geographic footprint over the next three years.
Another way firms are looking to attract new clients is by increasing the scope of services they offer. Over the next three years 39 per cent of firms plan to offer new legal services, 32 per cent plan to offer new online services (either legal or non-legal) and 12 per cent of firms plan to offer new non-legal services.
Other key challenges law firms face are improving operational efficiency, staying ahead of technology, differentiating themselves from other firms and growing firm profits.
To tackle these challenges law firms are planning to make changes to their pricing models, resource strategies and digital presence.
Firms plan to shake up their pricing strategies with almost half of all law firms (45 per cent) planning to offer more services on a fixed-fee basis, 23 per cent planning to offer more services on a value price basis and 12 per cent planning to offer more services on a capped-fee basis.
Resource strategy and business structure is also an area of future change with 45 per cent of firms planning on increasing their flexible work practices over the next three years. Thirty-two per cent of firms plan on increasing the number of permanent part-time employees, 21 per cent plan on restructuring their practice overall and 18 per cent plan on increasing their use of outsourced operational services.
Another trend for firms is investing more in their online marketing, with 59 per cent planning to increase investment in their online presence and social media, 32 per cent planning to increase investment in digital lead generation programs and 16 per cent planning to increase investment in online advertising.
The report forecasts a shift in the way legal services are purchased and commoditisation of legal products through digital technology in the future, as well as new ways of delivering legal services led by a range of ‘newlaw’ disruptors in the market, and a growing need for firms to stand out in a competitive market by offering unique value that is difficult to replicate.