Much like any other business, a law firm has to have an understanding of the competitive landscape to be successful. Conducting a SWOT analysis can leave a firm with a better understanding of its position. SWOT stands for strengths, weakness, opportunities and threats. By examining these areas, the law firm can position itself for greater success,
Document Your Law Firm's Strengths
A law firm’s strengths can be measured in terms of personnel or capabilities. If a firm specializes in the technical aspects of patent law cases, for example, having lawyers with that background and expertise on staff can make the firm a leader in a specialized field. Reputation can also be a strength. If a firm is known as the best in the area in family law or corporate takeovers, customers seeking that expertise likely will look there first.
Examine Your Law Firm's Weaknesses
Similar to measuring strengths, law firms must look inward when determining weaknesses. For example, a firm without many openings at the partner level and no process to install new ones may see its finest younger attorneys seek better opportunities elsewhere, which puts it at a disadvantage. A lack of business focus may be a weakness if a firm winds up taking on such a diverse variety of cases that it doesn’t become known for anything in particular.
Seek New Business Opportunities
Many law firms use their strengths to gauge the worthiness of opportunities, although that isn’t a requirement. For example, a firm that specializes in immigration law may see an opportunity for expansion because of the changing laws and processes in its state. Other firms might find opportunities that become accessible with a change in strategy.
If a law firm thinks regulatory changes may expand business opportunities in an arena complementary to its current field of expertise and notices that it will be able to hire lawyers capable of filling that void, it can sense an opportunity in expansion. New technology and data privacy laws, for example, provide an opportunity to develop a new area for expertise for those law firms willing to spend the time learning about the new regulations and how they can provide additional expertise to their new or existing clientele.
Watch for External Threats
Threats are external challenges facing a law firm that can either undermine strengths or exacerbate weaknesses. A firm specializing in death penalty cases can find itself in a precarious position if its state abolishes the practice, while law firms that grew rich representing high-tech companies in a particular region may be left without customers if that sector closes down or its operations shift elsewhere. Agencies that charge top prices based on a premier reputation may find themselves vulnerable if a new firm threatens that market position.
A Tool for Developing Strategy and Targeting Growth
A SWOT shouldn’t be seen as the end of a law firm’s strategic planning. Rather, it’s an exercise designed to paint a comprehensive picture of the current situation and what might arise down the road. At the end of a SWOT analysis, the firm should know the areas it can target for gaining new expertise and achieving growth and success. The SWOT analysis will also help it to develop a strategy to mitigate weaknesses and overcome potential dangers to business.