Can legal services face up to the 21st Century challenges? it’s clear that the web is now an important channel for law firms and this trend will only continue.

By now the severe challenges facing the legal profession will be familiar to all but the most complacent of high street firms. The UK’s regulatory environment which once protected solicitors from competition has just undergone the most radical shakeup in its history, a moment akin to the big bang in financial services of the mid-eighties.

article by Richard Cohen Chairman of Epoq Group

Is it time to herald the death of the high street? When accessing legal services consumers prize expertise, trust and local knowledge; all the key values of a smaller firm. This suggests that law firms with good local reputations with be able to withstand competition if they can successfully reach out to and meet the needs of this potential client base. To do so will require these firms to overcome two major obstacles; the demands of clients for greater convenience and ease of access to services and the now pressing need to generate greater efficiencies within the practice. With advances in technology both are now within the capabilities of small firms.

Legal Services Policy Institute estimate as many as 3,000 high street law firms (or 35% of the total) will have to disappear in the subsequent upheaval

The small size of most firms and a set of engrained cultural problems have prevented many from investing sufficiently in customer service. The result has been a very high number of complaints and a poor public reputation.

It’s clear that innovation is required but many firms still operate only during traditional office hours and require clients to visit the office; a practice which is more and more out of step with the modern lifestyle. A large segment of today’s consumers of legal services are part of an ‘internet generation’ which is highly receptive to new methods of online delivery. Our own research, conducted by YouGov, revealed that 56% of consumers expect good law firms to give customers the ability to use their services online in the next couple of years.

Far from being peripheral, it’s clear that the web is now an important channel for law firms and this trend will only continue. The question is can law firms offer more than just brochureware for their online presence? Technology platforms have come to market which operate on a ‘software as a service’  (SaaS) model,  which allow a law firm’s clients to collaborate with their solicitor and perform legal tasks over the internet.

The impact of these web-based, interactive applications is to save lawyer time and often increase lawyer productivity and profit margins, while providing a more convenient and satisfying experience for the client. Small law firms can now adapt their business model without prohibitive capital investment, service their clients in a very different way to the traditional high street firm and overcome many of the barriers described above.

An example of this new model is DirectLaw, an online legal document drafting solution  which uses pre-programmed logic to ask the user the same questions a lawyer would ask in a client interview. As the user answers these, the system determines the right language and clauses to be inserted into the document to reflect the client’s circumstances. The end product is a highly detailed first draft of the legal  document which has been individually tailored for the client. Once completed, the draft can be securely sent through to the solicitor for review and further changes. The client is also able to log into a secure client extranet, communicate electronically with the firm, pay fees and check the progress of their matter.

Using this approach, legal documents can be produced at a fraction of the internal cost thus increasing a law firm’s recoverable hourly rates. The time that solicitors have to spend on the interview process is massively reduced, yet from the clients perspective, the firm is providing a more convenient and accessible way of delivering law.

Furthermore, by shifting a proportion of the legal work onto the client fee-earner time can be freed up to concentrate on more complex matters and consultative elements of the solicitor-client relationship. And, as the service can be paid for online, further cost savings can be achieved by negating the need to issue and chase up invoices.

For law firms implementing this model the website is increasingly becoming the primary way to relate to clients and manage the flow of legal work. Firms can add information to their home page about their interactive capabilities, which save clients time and money. These will set firms apart from others and increasingly attract a client base that prefers to do business over the Internet.

Another area of opportunity is that of pricing. With an online strategy that reduces internal costs, law firms could use their improved margins to address client demand for clarity of price as they will be able to provide certain document services at a fixed fee.

The market in which we have been used to operating is changing beyond all recognition. The entrance of retailers, banks and insurers into the market will introduce consumers to new models of legal service delivery; multiple service levels, legal packages, efficient customer service and greater accessibility. However this can serve as a catalyst for change amongst traditional law firms, offering scope for some real innovation, and affording firms the opportunity to build better relationships with clients, generate new revenue streams, and tap into latent markets.