As the Big Four make significant increases in brand strength, how can smaller firms remain competitive?
The legal sector is in a state of flux. Technological evolution, regulatory change and shifts in customer demand have unlocked the market and thrown away the key. From the rise of virtual firms and other technology-led Legal Service Providers to sole practitioners and high street firms, competition is fierce and getting fiercer.
However, if the influx of new entrants and tech start-ups wasn’t enough to worry well-established firms across the country, it seems the biggest threat to smaller legal practices comes from none other than the Big Four.
Deloitte, EY, PwC and Thomson Reuters – followed closely by KPMG and Axiom – have all enjoyed resounding success with their legal service offshoots; their strong brands, significant wealth and massive size already proving disruptive to the legal market. But is it any surprise? Considering the level of resource, financial power and international presence that these accountancy firms boast, their expansion into the legal sector made logical sense.
Unfortunately for smaller firms, these world-renowned brands have reputation on their side. Winning new clients in practice areas such as tax, finance and M&A transactions grows increasingly challenging when firms like Deloitte and PwC are the competition. Perhaps unsurprisingly, research from American Lawyer suggests over two in three US law firm leaders regard the legal arms of the Big Four as a major threat – a worry that is largely shared by their UK counterparts.
With the Big Four at the door, how can smaller legal practices retain their competitive edge with their prospective client base?
Provide a personalised service
Competing with a global accountancy giant may seem impossible for a smaller, high street practice. But don’t lose hope: in this seemingly unbalanced fight, David can beat Goliath by offering a personalised service. This denotes working in a proactive way with your client, it means learning your client’s business and industry.
Instead of always responding to emails with the promise of a call, make the effort to contact your client first to provide them with updates. If they are local to you, offer to arrange an in-house seminar for their people. It’s these small but significant actions that will strengthen the client relationship.
Increase transparency and trust
More than ever, legal consumers seek law firms who can guarantee a quality service and offer complete transparency on their fee structures. This was confirmed by research from the Legal Services Board, who found that when small businesses believe they can trust the transparency of legal providers on fees, they are twice as likely to seek the advice of those lawyers.
With this in mind, a small but well-seasoned team of lawyers who are open and upfront about their rates from the outset can provide prospective clients with reassurance that their matter is in safe hands.
Be innovative to stay competitive
The business of law is changing fast: today, clients expect a service that is not only of a high standard, but is reliable, efficient and cost-effective. In turn, the legal sector has evolved to meet the needs of an on-demand society, adopting new business structures, billing models and technology.
In this fast-moving landscape, small firms must constantly keep their focus fixed on the future; they must look to the client experience and actively make an effort to challenge outdated practices and inefficient processes. This could include the addition of a new pricing option for clients such as a subscription fee that allows for more flexibility and forward planning, or the adoption of an AI powered assistant to bring accuracy and speed to legal research.
Keep making connections
While opting for a one of the Big Four accountancy giants has the allure of size and status, most people prefer to buy from people they know and trust. If your firm is to remain competitive, you must invest time into networking with prospective clients and build a profile with your target audience.
Your aim is to prevent your connections from considering the competition by building strong working relationships, but this is only made possible through a sustained commitment to building your network in the first instance. Social media might be helpful, and an engaging newsletter won’t go a-miss, but it’s the face-to-face interactions that will give you a better chance at winning new business before the Big Four swoop in.