But there is considerable potential for smaller firms to thrive by serving the "99 percent" of our society, the small to mid-size businesses and individuals whose legal concerns will undoubtedly endure.
The fundamentals of the law-firm business model for serving them will remain the same: marketing (secure and maintain clients), production (do legal work efficiently and effectively) and collection (get clients to pay); however, many factors that affect these fundamentals are changing rapidly.
New competition, new technology and new billing pressures are creating a new cost-benefit dynamic that defines the small firm's three-dimensional future.
Against that kind of competition, the successful firm must market by adopting technology to reduce cost.
The antidote is to abandon a strict, across-the-board hourly rate. Being able to maintain billings while becoming more efficient requires changing the billing system to embrace alternative fee arrangements. Using contingent, fixed, capped, value-fee approaches under which time is not the relevant issue is essential to make the most of the leverage from technology.
The fundamental survival equation for small firms and solos remains: get the work, do the work, get paid for the work. Business schools call that marketing, production and finance. Every business needs them.
The small firm that adopts the three-dimensional efficiencies will enhance its ability to be more efficient and professional in serving the client. That is the path to survival in the new-normal legal services environment.
© 2017 Edward Poll & Associates, Inc. All rights reserved.