Opportunity Abounds for Small Law Firms Willing to Innovate: Thomson Reuters Study

Topics: Business Development & Marketing Blog Posts, Client Relations, Efficiency, Law Firm Profitability, Law Firms, Leadership, Reports & White Papers, Small Law Firms, Surveys, Thomson Reuters

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Small law firms in the United States face a host of challenges, but within those challenges lies a lot of opportunity, according to a new study from the Thomson Reuters Legal Executive Institute.

For the third year in a row, the 2019 State of U.S. Small Law Firms report found that most small law firms face a wide variety of challenges, many of them considered to be “significant challenges” by firms participating in the survey. In particular, firms identified difficulty acquiring new client business and spending too much time on administrative tasks as some of the most common significant challenges.

Despite continued awareness of these issues, a relatively small number of small law firms report having taken concrete steps to address these challenges.

The report encourages small law firms to act, suggesting that 2019 is a prime year to move from awareness of these issues into action.

There’s far more to unpack in the full study. For a full discussion of the challenges facing small law firms and what might be done to move past them, download the 2019 State of U.S. Small Law Firms report here. 

Respondents to the survey provide insight into some of the strategies they’ve employed to help bolster success. When asked what factors had helped lead to positive performance in the 12 months prior to the survey, small law firms of all sizes responded that a focus on becoming more efficient, increasing client referrals, and growing relationships with existing clients had all played key roles.

It must be noted that, even if some of these firms may not have recognized a formal plan in their actions, the factors they identified as key to their improved success directly addressed what were some of the most common challenges. Improving client relationships and increasing referrals are effective strategies to help improve business development, among law firms of all sizes but perhaps more vital to smaller firms. Becoming more efficient also will help reduce the amount of time spent on administrative tasks, which can account for up to 40% of the average lawyer’s time, according to the survey.

Within these findings lies a roadmap to potential future success for small law firms seeking improved business strategies. Firms that have improved their performances identified clear factors that helped them improve. But the findings of the study show that many small law firms remain uncertain about how to confront the challenges in front of them. This creates what is often called a “first mover” incentive for those firms willing to take the lead.

Small law firms that are willing to innovate and iterate as they attempt to solve problems will find themselves ahead of many of their peers in terms of addressing factors that may be holding their practices back. The report offers several suggestions as to what small law firms may want to pursue in terms of strategic priorities. But candidly, any attempt to innovate will set small firms apart from those firms who are stuck in the status quo.