Archive for November, 2012
Despite the financial downturn and increased competition, it continues to surprise me how few lawyers effectively use competitive intelligence to evaluate market opportunities. Lawyers instead look for opportunities where they have found them in the past, wait for opportunities to find them, or engage in random acts of marketing without clearly identifying who they are trying to reach.
The greater the understanding of the market, the greater the ability to identify new opportunities and to articulate your unique value to existing and prospective clients.
A simple framework for identifying market opportunities are to look at four trends in the context of your current practice:
Economic climate. A strong economy contributes to legal needs driven by opportunity – deal flow, investment, joint ventures and strategic alliances. Businesses can use litigation as a strategy to protect, not just defend. In weaker economies, opportunistic legal activities still exist, but fewer businesses are positioned to take advantage of them. Often the legal issues that do arise are necessity deals and litigation, viewed as expenses and subject to significant price sensitivity.
Regulatory environment. Regulations add to the complexity to running a business. Heavily regulated industries and regions increase demand for legal services. On the counseling side, legal services are tied to risk aversion and will be considered in most cases as important and necessary expenses. Litigation can be high-risk, bet-the-company type matters, such as a multi-district, class action lawsuit alleging violation of a statute, or a single claim that could result in having a key brand pulled from the market. At the same time, increased regulations can also lead to more nuisance litigation.
Industry Trends. Industry trends can create or deter demand for legal services within specific sectors. Niche issues that impact a particular industry provide lawyers an opportunity for legal specialization. Industry trends that lead to demand also provide law firms an opportunity to be more targeted in their marketing and business development efforts.
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 region, so their legal needs bleed into other geographies. Additionally, the competitive landscape is not limited to the attorneys within the region.
Understanding 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.