This article has been written by Nicola Hamblett.
Nicola is a trainee solicitor at Duncan Gibbins and here she describes the main challenges facing commercial law firms.
The Challenges Facing Commercial Law Firms – What You Need To Know
We are in a changing commercial environment and law firms face the challenge to keep abreast of economic developments. Firms must address operational strategies and market themselves in a unique and diverse manner, revising recruitment initiatives and staff retention to ensure employees have the appropriate skill set and commercial awareness to deal with the current economic climate.
Solicitors must continue to be commercially aware and give practical and commercial solutions to clients as well as fulfilling their legal roles.
The 5 Main Challenges Facing Commercial Law Firms
Attracting New Clients and Retaining Existing Clients.
· Law firms need commercial awareness as competition between rival firms has become increasingly unyielding.
· Law firms need to have an understanding of the wider environment in which their organisation operates to attract and retain their client base.
· Client loyalty used to be taken for granted but these days it has to be earned.
· Firms face the challenge of remodelling their efficiency procedures to ensure they are maximising their existing resources.
· Cost-effectiveness of current policies may need to be scrutinised.
Current Economic Climate
· Major challenges include reacting to the downturn and the uncertainty of future growth.
· Firms must adapt to ensure they are evolving to meet their clients current and impending requirements.
· Firms must have the evolving structures in place so they can advance again once the economy gradually recovers.
· All firms face pressures of staff modifications and redundancies.
· The legal industry operates in an arena where clients are demanding discounted rates or advantages for providing a firm with their business. Similarly, an increasing amount of client’s are demanding partner attention with fewer trainee solicitors or newly qualified solicitors dealing with matters and as such, staff retention and modification is key.
· The possibility of challenges which could arise from the implementation of the potential reforms of Contingency Fee Agreements will impact on the legal industry.
· Lord Justice Jackson has spoken of addressing the issue of capping lawyer’s fees at 35% of damages in commercial cases and 25% of damages in personal injury cases.
· Whilst Jackson anticipated this would mean that the funding options would be widened, he believes we must be cautious before we cut down on those options.
Alternative Business Structures
· The emergence of Alternative Business Structures is another one of the challenges facing commercial law firms
· There will be more competition for solicitors who are already established.
· Law firms will need to reveal and display their unique selling points and demonstrate their ability as trusted legal advisers regulated by different honourable bodies.
· Law firms should seek new opportunities to develop innovative businesses in addition to improving and evolving their existing services.
Challenges Facing Commercial Law Firms – Why You Need To Know
It is important to be aware of these challenges as you may be asked about them in an interview – especially if you are applying for a job in a commercial law firm. By having knowledge on this topic it enables you to demonstrate to potential employers that you have done your research.
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