Law firms are in growth mode. Many will follow the tried and tested model of merging or acquiring other firms. A new LexisNexis report asks if there are faster and more reliable avenues for growth
LexisNexis Legal & Professional released on Thursday an investigative report entitled “The Laws of Organic Growth.” The report interviews 20 of the UK’s fastest-growing law firms of varying sizes and specialisms to identify how they have been able to grow at speed.
Two years on from the pandemic, the legal industry has proven its resilience. The sector reached an all-time revenue high of £41.58bn in 2021, compared to £36.78bn in 2020. The majority of firms met their 2021 end of financial year targets, with many exceeding expectations. Now, law firms are looking to make the most of the current climate by investing in expansion opportunities.
Law firms, the report discovers, tend to favor mergers and acquisitions to achieve growth. Bringing in a pre-established team seems an obvious way to immediately realize the benefit. However, mergers and acquisitions come with risks and don’t always deliver as promised. One of the biggest concerns identified by the research was that the loss of law firm culture during a merger can devastatingly impact staff retention, recruitment and client acquisition. Using in-depth interviews with senior leaders from across the legal sector, we dig into the most compelling alternative ways to drive growth and examine the benefits and risks these routes present.
The playbook for growth varies by firm. Increasingly, law firms are driving growth by finding new ways to leverage and maximize their current client relationships. This includes everything from equipping lawyers to successfully nurture key client relationships, to encourage secondments into important clients. Successful firms are giving partners formal training in sales techniques and investing in demand generation activities such as publishing thought leadership, organizing and/or attending trade events, joining industry bodies and creating bespoke content for clients. Another popular approach is to bundle additional business services, such as legal technology solutions together with traditional legal services, to create a personalized package with greater value.
A number of the report’s contributors reveal how their accelerating growth stems from attracting and retaining the right people. They argue that this offers sustainable and targeted growth in areas of opportunity, rather than exposing the firm to the disruption of a merger. The report explores some of their talent management tactics.
Dylan Brown, the report’s editorsaid:
“While there is no ‘one-size-fits-all’ approach to growth, it’s clear that there are some winning strategies law firms of all sizes are deploying to drive growth organically.
Whether you choose to empower your employees with a growth mindset, utilize new technology to enhance your services, commit to building longer-lasting relationships with your clients, or take on a more flexible approach to both billing and remuneration, the key to growth seems to be stem from investing in innovation.”
In the years to come, the firms that innovate – and subsequently embrace a culture of innovation – will have maximized these growth opportunities and more to create a legal offering that sets them apart from the competition.”
Read the report here: https://www.lexisnexis.co.uk/research-and-reports/organic-growth.html