How to address the most urgent issues small law firms face in 2018

Legal Insights from Thomson Reuters

As they enter 2018, small law firms are facing unprecedented challenges and opportunities from increasing competition to headline-making security threats to vetting technology that will mitigate these risks.

Unfortunately, there’s only so much time to respond and practice law.

To help you cut through the noise and prioritize what you should be paying attention to, we turned to four legal experts to share what they think are the hottest topics for small law firms in 2018. Here’s what they have to say.

Make cybersecurity a top priority, says Nerino Petro, Esq.

Petro is a long-standing technology evangelist. He is CEO of a legal technology consulting firm, and technology co-editor for the ABA GP|Solo Magazine. He also serves on the board of the ABA TECHSHOW.

He is alarmed by how little attention small firms give cybersecurity and says that must change in 2018.

“A critical issue that small law needs to take seriously is protecting client information with cybersecurity. I just don’t think it’s a high-enough priority,” he laments.

He believes other pressing issues - like keeping the doors open and attracting clients – divert lawyers’ attention when they also need to be concerned about their data security. 

“The problem is the exponentially increasing number of threats posed by ransomware, phishing (emails that convince recipients to click on a virus-laden link or attachment) and other forms of penetration that access the bread and butter of an attorney - their information, time-and-billing records, bank accounts and client files. The cost of a data breach can easily put a small firm out of business,” he explains.

He says this is what kept him up at night when he was chief information officer at HolmstromKennedyPC. Other small law firms should be concerned, too.

“Here’s the reality: You have to be right 100% of the time, the bad guy only has to be right once. There’s always going to be the risk you’ll get infected,” he warns.

Petro advises mitigating this risk with:

  • The most up-to-date malware, firewalls, and antivirus protection
  • Staff training to recognize phishing emails
  • Robust data backup that is air gapped - physically isolated from unsecure networks - so viruses cannot reach it.

“Technology is one thing, but the human element is something else. And, to be honest, I’ve received emails where I had to look long and hard to see if they really were legitimate,” he admits. “If it’s tough for those of us who deal with this, it’s even tougher for the uninitiated.”

Stop using email to communicate with clients, says Jim Calloway, Esq.

Calloway is the Director of the Oklahoma Bar Association’s Management Assistance Program where he frequently writes and speaks about legal technology issues. He served as co-chair of the ABA TECHSHOW.

Like Petro, Calloway’s top concern is cybersecurity. But his focus is on client communications.

“Lawyers really need to consider whether emailing anything significant to a client is appropriate,” says Calloway, who advocates using secure client portals instead.

Client portals are online interfaces that allow you to securely exchange documents and messages with clients. The best are completely encrypted, and are integrated with law practice management software to streamline information sharing and matter management.

“We have an independent, ethical responsibility to protect our clients’ confidential information,” he insists. “That’s why it’s so important for lawyers to err on the side of protecting client information, even if they may not see examples where unencrypted email has gone wrong.”

Get client-focused, says Heidi Alexander, Esq.

Alexander is Director and Law Practice Advisor for the Massachusetts Law Office Management Assistance Program and Deputy Director of Lawyers Concerned for Lawyers, a nonprofit lawyer assistance program.

“I think what’s really hot and will become hotter as we move forward is the focus on clients,” says Alexander. She points to the success of companies, like Amazon, that are leading the way in responding to the needs of their consumers.

“Small firms really need to think about how to engage the client, focus on them, and show them value by hiring an attorney,” she explains, “especially in the face of competition like DIY legal services.”

She notes that savvy firms approach this by:

  • Using technology that makes it easier for clients to hire and communicate with lawyers, and provide them a better value by allowing firms to do more in less time.
  • Creating roles that are devoted to client management and service.

“It’s important to think from the client’s perspective and really attain an understanding of what they are going through and how their needs are changing,” Alexander explains, “as opposed to focusing on what you do and how you operate.”

Differentiate yourself, says Ellen Freedman

Freedman is the founder and president of Freedman Consulting, a law-practice consulting firm. She also serves as the Law Practice Management Coordinator for the Pennsylvania Bar Association where she assists members with management issues and decisions on the business side of their practice.

Freedman is concerned about a trend that has been emerging in the past five years and is culminating in dwindling workloads - and the revenues that come with them - for long-established lawyers.

“Lawyers are increasingly finding they’re losing momentum before they get to the finish line of retirement,” says Freedman. “They’re five, seven, ten years away, and all of a sudden the amount of work coming into the pipeline is down to a trickle.”

The challenge is that they’ve lost all the inertia of past marketing efforts she says.

“They’re starting over to reverse a trend, and they’re starting over at an age where there’s much greater competition, and they have less energy and time,” explains Freedman. “It’s one thing when you’re young and relatively unencumbered. It’s quite another when you’re on the tail-end of your career, you’ve got family to attend to, maybe aging parents and kids in college.”

She urges lawyers to start thinking like marketers and find their point of differentiation.

“If you can’t clearly say to a potential client or a referral source why you are a better selection than the guy next door, then don’t expect to convince anyone to hire you,” warns Freedman. “You’ve got to be able to say it and mean it, and if you can’t do that, you need to figure out what you can do to make yourself the best choice.”

How will you respond?

As you plan for 2018, consider how you will address the issues of security, client confidentiality, client service, and marketplace differentiation. How you respond could very well position your firm as a responsive leader in the marketplace or one that is still operating like it’s 1980.

Which one would you want to represent you?