Technology created a market opportunity for law firms
But not in the way you might have expected
Even though technology’s impact is felt by law firms, all of its focus thus far has been on the actual law work. There has been surprisingly very little innovation in sales and marketing. In today’s newsletter I talk about the implications of that trend, the market opportunity it creates, and a few ideas you can put into practice.
This week I read a pair of articles that made me think about where things are headed in the law firm ecosystem. The first, Competitive Moats explains why constant innovation is ultimately what matters. The second, When Content Creation Goes To Zero, discusses how AI will impact content creation. Both articles, importantly, rely on the central assumption that businesses ultimately do only 3 (very important) things:
Create stuff
Acquire customer to buy stuff
Distribute that stuff
The one thing that jumped out at me, as these 3 themes apply to the law firms, is that innovation is all tied to (1). The two big B2B tech trends of the past 10 years, cloud & AI, both relate to lawyers creating work product. For example, the tech has helped accelerate the process of collaborating on documents (e.g. contract management), storing data (e.g. doc management), or finding evidence (e.g. e-discovery).
As creating legal work product becomes cheaper and easier, it stops being a way to differentiate your firm. That’s why so many successful solos and small firms have sprouted up—they can provide work product that’s just as good as the big firms, at far lower rates, because they have less overhead. Competition for business is fierce.
What about (2) customer acquisition and (3) distribution? Well, law firms still approach sales the old way—relationships and connections.1 There hasn’t been much change since 20-30 years ago at all. Which is very different than in, say, the highly competitive tech startup scene where there’s constant innovation on customer acquisition (e.g. digital marketing, social media marketing, etc.) or distribution (e.g. splitting cold callers & closers, creating signature events, etc.)2