As the reality of Brexit begins to sink in, many business leaders, including those at small and midsize law firms, will be sitting down to figure out the impact on themselves and their clients as well as what they can do now to prepare for the uncertainty that lies ahead.
While we do not know exactly how Brexit is going to pan out, larger organizations, including large global law firms, will have been running through various scenario-planning exercises to better understand the implications. (An excellent summary of the immediate workload considerations across various practice areas, UK Votes Out: après nous, le deluge, is available on the Practical Law In-House blog.)
For those small and midsize law firms where resources are generally scarcer and the senior leaders are also those advising clients, assessing the impact of Brexit is much more difficult. With that in mind, highlighted below are five key factors that small and midsize law firm leaders might want to watch out for in relation to their business as they look to navigate the aftermath of Brexit.
- Introducing more flexibility — The referendum result is only the very start of a much longer process. Until the terms of the UK’s exit become clearer, it is likely that individuals and businesses are going to scrutinize any investment decisions much more rigorously. Law firms will not be immune to that process. As such, a key question will be whether, in the current climate, law firms can introduce more flexibility into their operations. For instance, is extra headcount needed to handle short-term spikes in work? Or can a mix of technology and flexible staffing solutions meet that need? And is more office space necessary? Or can flexible and agile work processes offer a more suitable solution?
- Keeping on top of changes in legislation — Most commercial clients of law firms will be asking the same question: What does Brexit mean for me and my business? Law firms consistently want to be seen as the trusted adviser to their clients. If they are able to anticipate implications of future legislation and interpret how it may impact clients, they will be better placed to deliver superior customer service. Navigating clients through this period of legislative change is going to become an essential focus.
- Staying focussed on the factors you can influence — Most firms have been looking at the way they deliver legal services to ensure it is done in the most efficient, client-centric and effective way possible. This does not change due to the result of the referendum. Now, more than ever, the focus on doing more with less and driving efficient delivery of legal services is going to be crucial. What that means for each individual firm is going to differ, but the overall goal of being as efficient as possible needs to remain. For example, are firms handling matters effectively and utilizing technology to assist with this? Do firms have access to maintained know-how that provides a comprehensive starting point, or are they reinventing the wheel each time?
- The importance of being proactive — Work is going to be cyclical, and firms need to think long and hard as to what areas they look to invest in. We know that advisory and regulatory practice areas are probably in for an immediate boost as the upcoming changes start to take hold. Can small and midsize law firms pivot to take advantage of the opportunities that may arise? Over the short- to medium-term, it is likely that transactional practice areas will see a drop-off in work. How firms can utilize existing relationships they have in this area is going to be key. It is essential for all businesses, including small and midsize law firms to remain close to their clients during this period. In times of uncertainty it is easy to become inward-focused, but anticipating the needs of clients to ensure opportunities are maximized is crucial.
- Providing a higher degree of predictability — In a period of uncertainty, clients’ desire for clarity and predictability around their legal and financial matters will become an imperative. This is likely to apply to legal fees as well as advice. Could the on-going uncertainty present firms with an opportunity to differentiate themselves by offering purely alternative fee arrangements based around pricing certainty?
Despite the uncertainty, there are going to be opportunities for firms. Those who deliver excellent client service, anticipate the impact that these changes may have on their clients, and offer advice in a timely manner have a real chance to set themselves apart from the crowd.