Law firms are a business like any other, more closely related to small entrepreneurial shops for the most part than big corporations, although large firms with multiple branches exist. However, due to the nature of how they are created, law firms have certain inherent strengths and weaknesses that they must overcome to function as a business successfully. A SWOT analysis (strengths, weaknesses, opportunities, threats) should highlight these for strategic planning.
Clearly, lawyers have a significant depth of experience in the core product a law firm produces, intellectual legal services and material. With years of experience in most firms, there is no shortage of expertise. And combining older attorneys with new recruits fresh out of law schools with the latest information creates a synergy in finding and using the right information to win cases.
Further, lawyers must deal with people all day long. This develops relationship, and more importantly sales, skills in providing services. Combined with expertise and knowledge, the aggregate produces revenue for the business via clients.
As much as lawyers know the law, they frequently have poor business skills until they’ve spent a significant amount of time running a business. Accounting, personnel issues, operational management, facility management and general leadership issues are not taught in law school. Too often lawyers learn these skills the hard way, and an analysis can quickly gauge the business weakness of a firm by evaluating its administrative resources.
Significant advancement in technology has opened up new arenas in property rights, information management and related laws, criminal law, international law and many other areas. These are all legal-prone topics that need guidance and expertise to avoid problems in the future. Law firms can easily make a name for themselves in these areas and use them as business opportunities that can pay long-term dividends with technology clients.
Competition among competing law firms continues to be the number one threat to legal businesses. The field continues to become more and more glutted with new lawyers and ventures trying to make a go in the same crowded territories. As a result, law firms that are innovative and lock a niche on specific areas of law better than others will win out, particularly if they can show a record of winning cases on the given subject matter. A SWOT analysis should compare expertise availability and case win/loss statistics with affected client/customer populations to gauge how much of a threat competition is to a reviewed law firm.
A good SWOT analysis will take all of the above elements of a law firm and conclude that a law firm's greatest asset, it's lawyers and partners, can also be the firm's greatest weakness. How these two factors are balanced will dictate whether new market ventures can be taken advantage of, or if bad planning lets competitors take over valuable clients.
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