Using legal data for strategic law firm planning is no longer reserved for BigLaw. With the improved access to litigation data from numerous vendors in the exploding legal tech ecosystem, solo practitioners, small law firms, and regional and midsize firms can take advantage of insights from data to position themselves as leaders and market movers in their respective practice areas and jurisdictions.
In “How Attorneys Can Use Legal Data for Business Development and Intelligence,” we looked at how attorneys interested in incorporating legal data into their marketing toolkit can begin by using a series of simple reports to view their clients’ and competitors’ litigation data. This allows firms to find new business opportunities and better understand their real market share.
Then, in Part 2 of this series, “How Attorneys Can Use Legal Data for Legal Recruiting,” we looked at some practical applications of litigation data in the recruiting process and detailed some fundamental questions firms should ask and answer before determining which laterals to hire.
In this third and final article, we’ll touch on how firms of all sizes can use litigation analytics to spot trends impacting their most important revenue streams and continuously monitor what’s happening in specific practice areas to strategically position themselves for the future. We’ll also discuss how to combine insights from litigation trends with lessons learned from previous articles to determine where to focus your marketing efforts for the greatest return.
Uncovering Opportunities and Diagnosing Weaknesses in Your Markets
For law firms, it’s critical to gather intelligence about real-time trends that are creating sharp and sudden changes as well as longer-term trends affecting the overall health of your markets.
A great example of how firms can use short-term trends to shore up their practices and prepare for downturns comes from the dramatic decline in bankruptcy cases filed in 2020. It’s important to look in retrospect and see that the total volume of personal and most business bankruptcies decreased to the tune of over 250,000 less filings than previous years. But what’s even more important for law firms is to see this happening in real-time.
With the increased availability and affordability of litigation data from a range of providers in the legal tech sphere, firms that depend on bankruptcy filings as bread-and-butter revenue drivers should be getting monthly or weekly trends reports that show exactly what’s happening in the jurisdictions they cover. Then, as they see shifts in real-time, they can have the internal discussions needed to determine how quickly to pivot away from or supplement their core practice areas — and make decisions rooted in data.
In addition to monitoring short-term shifts and trends, law firms need to periodically take a 10,000-foot view of what’s happening in their markets to ensure their prolonged health and viability. For instance, one trend we reported on previously was the slow and steady decline of asbestos-related litigation in state courts.
Though the spigot of asbestos litigation didn’t shut off overnight, it has gradually declined over the past two decades. The decline began to pick up pace in recent years, moving a once vibrant practice area for personal injury attorneys to a less stable and sustaining opportunity. Instead of wishful thinking on the profitability of certain practice areas, by looking at macro trends impacting their markets, law firms can take a data-driven approach to strategic practice planning and position for success.
Refining Strategic Law Firm Business Development Objectives
Uncovering weaknesses in the market and potential opportunities on the rise is a great way for law firms to start using litigation trends to inform their business development initiatives. But they shouldn’t stop there. Aside from strategically positioning the firm as a whole and turning the ship in the right direction, litigation trends can also guide future decision-making on where to focus marketing resources.
As covered in Part 1 in this series, one of the easiest ways to begin using legal data to boost business development is to look more intently at the firm’s clients. By seeing the full picture of a client’s litigation portfolio, a law firm can rapidly identify their market share, find whether more lucrative litigation work opportunities exist, and assess the trends in terms of their growing or declining relationship with the client.
However, the picture of what the firm’s future relationship with a client could look like can’t be completed without looking at broader litigation trends in their industry — as well as niche litigation issues based on their specific products and services.
When you layer overarching trends affecting the practice areas and hyper-specific types of litigation a client is involved in over the top of that client’s specific legal data, a law firm can spot:
- Macro trends that show a stable and ongoing opportunity for firm revenue.
- Real potential for growth requiring additional marketing resources being brought to bear.
- An impending decline spelling a relationship on the outs.
Litigation trends tell law firms where the chips are falling with clients before the next hand is dealt, so they can decide with greater confidence whether to fold, stay put, or go all in.
Strategic Law Firm Positioning for Future Growth
Regardless of size, law firms should be using legal data for strategic positioning. If a firm’s marketing and business development resources are limited, that’s all the more reason to ensure the strongest returns possible by leveraging litigation trends.
Even if you have a huge budget, there’s no reason to throw good money after bad when the tools are readily available to diagnose client relationships and determine market opportunities. In the competitive legal services market, firms that keep their finger on the pulse of litigation trends will be the best prepared to position themselves for the future.
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