Archive for March, 2012
By Debra Baker
“Baseball was theater. But it could not be artful unless its performances could be properly understood. The meaning of these performances depended on the clarity of the statistics that measure them.”
- Michael Lewis, Moneyball
Like baseball, the legal profession is as much art as it is discipline. But if objective measures will provide clarity as to how legal services are defined, what are those measures?
Legal Vertical Strategies analyzes the legal landscape from three perspectives: Demand, Client Base, Competition. Each has its own set of measures that provide insight into the overall market.
Demand identifies what opportunities exist, with whom, and the relative value of those opportunities, informing decisions about:
- Target practices and industry groups;
- Talent development;
- Maximizing marketing and business development investment;
- Aligning resources.
Economic, industry, regulatory and geographic trends all impact demand.
Economic climate. A strong economy contributes to legal needs driven by opportunity – deal flow, investment, joint ventures and strategic alliances. Weak economic confidence stifles deal flow, lowering overall demand for transactional services.
Regulatory environment. The more regulations, the more complexity to running a business. Heavily regulated industries and states created environments increase demand for legal services.
Industry Trends. Industry trends can create or deter demand for legal services within specific sectors.
Geographic Trends. With increased globalization, geographic trends are important to understand even when evaluating the legal services market of a single region. Businesses inside that market do not limit their business to a given reason, so their legal needs bleed into other geographies.
Law firms need to understand the impact of these factors on the markets they serve in order to assess what type of work in their areas of expertise will be in demand. It will assist firms in identifying common characteristics among businesses with specific needs that can be used to more effectively target and market the practice.
The first of a five-part series.
By Debra Baker
Competition for a share of the legal services market has never been greater. Most firms struggle to identify how best to use limited marketing and business development time and dollars. Too often firms use subjective criteria when making decisions. They do what they’ve always done without measuring return on investment. They do what everyone else does because everyone else is doing it. Or, they do nothing, hoping their existing client base will be enough to get them through the future.
The reality is it won’t. The market has changed. Competition is increasing. Buyer expectations are greater. In the book and academy award-nominated film Moneyball, Oakland A’s General Manager Billy Beane applied objective measures to the business of baseball, focusing on statistics rather than “look and feel” to field his team. Author Michael Lewis observed:
If gross miscalculations of a person’s value could occur on a baseball field, before a live audience of 30,000, and a television audiences of millions more, what did that say about the measure of performance in other lines of work?
Legal Vertical Strategies is taking a page from Moneyball to help law firms use objective data to develop strategic growth plans, focusing on three aspects of the market that impact how law firms win new business:
- Overall demand for legal services
- How purchasers of legal services make decisions on who to hire
- The law firm competitive landscape
These external insights – demand, decision-making, and competitive landscape – combined with an analysis of internal insights related to attorney expertise, existing client base, industry knowledge and current market position provide an objective framework around which law firms can plan for future growth.
I’ll be discussing each of these three areas and presenting a framework firms can use to analyze the data in the contact of their own strategic growth in future posts.