Similar to any other enterprise, law firms can reap numerous benefits from SWOT analysis as a law firm’s growth heavily depends upon its productivity, profitability, and reputation in the legal sector.
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities, and Threats. A thorough SWOT analysis examines internal and extremal factors that can affect the firm’s capabilities to attract and retain clients, and the potentials to run progressively toward growth.
What is SWOT Analysis?
A SWOT analysis is an efficient tool to evaluate an organization’s strengths & weaknesses (internal factors) and opportunities & possible threats (external factors) to it. It is typically performed to strengthen a strategic plan to effectively determine where the company currently stands before moving ahead with opportunities and dealing with limitations.
In this piece of writing, we will discuss all four aspects of SWOT analysis in detail, let’s get it started.
1. Know More About Your Firm’s Strengths
Examining strengths means evaluating strong points that already exist within your firm. Note that a significant part of your firm’s strength comes from the excellent and beneficial qualities or characteristics of your employees, while the outside market doesn’t make any difference to it.
Here’s an example to understand this better. Say you have a few attorneys having more than two decades of experience in practicing law; that immense level of experience is a strength. Even if you don’t get any new client in a month, that strength will remain the same.
Similarly, if you are using third-party legal support services to enhance your operations and lower the workload, the service provider will also be counted as your firm’s strength.
Other strengths can be determined as materialistic strengths, such as up to the mark computer systems providing better operational efficiency and brand image or reputation earned by delivering high standard client service and bringing satisfactory case outcomes.
Things to focus on while analyzing strengths
- What defines your firm to be better than your competitors?
- Which aspects of your firm get clients’ appreciation?
- What makes your cases and law firm successful?
- What are the key points people choose you to have their back?
2. Figure Out Your Firm’s Weaknesses
Your firm’s weaknesses also revolve around its internal aspects. Keeping the costs of service low to stay competitive in the legal industry is a weakness. Similarly, depending upon payments from clients to manage operational costs is a bigger weakness. The marketing department not being able to bring more clients, is a weakness.
Other negatives may arise due to not having sufficient staff or appropriate systems for better efficiency. For instance, these days, a lot of lawyers and law firms prefer to use online tools and software for tasks, such as contract drafting and management, legal research and writing tasks, and document review.
Some of the useful software for lawyer and law firms:
|CaseBox||Document Management Software|
|Jarvis Legal Softw||Legal Practice Management Software|
|QuickBooks||Law Firm Accounting (Including the Creation of and ability to send out invoices), Legal Billing (Including both timekeeping and tracking retainers paid), Report Creation.|
|LawGeex||Make the Process of Reviewing Contracts|
|Clio||Legal Practice Management Solution, Generate Bills, Organize Contracts, Automate Documents, Comply with Trust Accounting Regulations.|
|Fastcase||For Legal Research|
|Lexis for Microsoft Office||Legal Drafting and Review Too|
|Tiny Scanner||This app turns your phone into a scanner and saves documents as either a photo or a PDF.|
|AbacusLaw||Legal Case Management, Contract Management, Conflict Management, Billing & Invoicing|
|PC Law||It is powerful billing and accounting practice management software.|
|Casetext||Unlimited access to database such as Brief Database, Black Letter Law Database, Holding Database|
If your lawyers are unaware of such highly helpful tools, it is a weakness alert. Not just this, but the inefficiency of administrative operations is also a contributor to weaknesses of your law firm.
- In which areas you need to have more knowledge and expertise?
- What were the reasons you had fewer clients in the previous months?
- Which are your firm’s aspects you can’t brag about?
- What are the factors limiting your firm’s efficiency?
3. Look For Attainable Opportunities
In SWOT analysis, opportunities are external factors that your law firm depends upon for sustainability. As it requires preparing projections, analyzing opportunities becomes a subjective and somewhat difficult task.
For instance, if your firm is practicing real estate law, a huge housing development project proposed in your area is an attainable opportunity.
If you consider joining hands with another more established firm, you can call it an opportunity. Opportunities also include;
- Having media attention to your firm
- Widely published legal victories achieved by your law firm’s attorneys
This could give a boom to your brand image, resulting in more business from existing clients or/and a growing number of new clients. Spare some time to look around for opportunities; there are probably more than you could have ever expected.
Things to consider while analyzing opportunities
- What are the trends or events that could bring more business to the firm?
- What amendments in the law could have an impact on your business?
- What technological advancements could transform the way you conduct your business?
- Can any of your strengths bring business opportunities?
4. Become Aware Of Threats To Your Firm
This section of SWOT identifies things that might later become your firm’s weaknesses. One of the biggest threats for law firms is competition, such as another firm that holds more potential to take advantage of identified opportunities.
New laws might also become a threat to your law firm. Here’s an example to explain the same. Say your law firm provides expert legal service in defense of criminals, and suddenly, some laws decriminalize activities for which you are representing your client; here, you could lose clients due to changes to the laws (external threat).
Threats can also include slowdown or closure of your clients’ business, or some of your clients are no more willing to continue with your services.
- What are the possible obstacles to revenue growth?
- What makes your competitor firm getting more business than yours?
- How could impending policies negatively affect your firm?
- Do you have cash flow issues?
- Are you stuck with bad debt?
What Makes A SWOT Analysis Important?
In any business, the business analyst department generally performs a SWOT analysis. However, if you neither have a BA team nor a business analyst, being the owner, you should do it yourself or give this responsibility to one of your employees having excellent analytical skills.
SWOT analysis is the base of an active and strategic business plan as it allows you to sit with other board members of your firm to discuss its shot as well as long-term objectives. The best you can bring out from this analysis is opportunities and threat detection.
It has now become an apparent part of the strategic planning; however, there are still many owners who are overlooking it. It is a simple yet compelling method as it can efficiently help in solving several business problems if implemented appropriately.
Useful Tips on SWOT Analysis
Having intuitions about possible threats is not as effective as researching them. But you should not ignore your instincts; instead, try to find out more about them to understand how they could actually hinder your business.
Priority Should Be There
It is not necessary to do everything based on SWOT analysis’ results or do everything as per the order. Put each one (Strengths – Weaknesses – Opportunities – Threats) in the list as per the level of importance. Thus, you could highlight your greatest strengths and rectify your biggest weakness first.
It is advised to avoid responding to every weakness with an excuse. Problems in your law firm could only be resolved when you actually take them as problems.
Consider Adopting Technology
Artificial Intelligence (AI) has been helping the legal industry in managing specific tasks, such as reviewing documents, which is actually called technology-assisted review (TAR), legal research, legal document, contract analysis, proofreading, and organizing documents.
Not just this, AI-powered software can also help you ensure that the data you are using for SWOT analysis is accurate and authentic.
Know Your Competitive Advantage
Regardless of the reason behind conducting a SWOT analysis, you should know if your firm is giving a tough competition to competitor firms or not. Recognize the critical points of services you offer, especially those that your competitors are unable to.
Know Where The Informative Data Is
While analyzing strengths and weaknesses, take a thorough look at your firm’s core competencies, value chain activities, all operational areas, resources, R&D processes, and organizational environment and culture.
For opportunities and threats, you can assess competition by getting up-to-date information on market changes and trends.
SWOT analysis could do wonders for your firm. It helps you understand what essential steps you should take in the future for business growth. However, factors related to SWOT would probably lurk in some part of your mind; therefore, preparing a complete report in an organized manner will help you and your colleagues to understand what actions are required further. You would also feel less burdened and have better control over your legal business.
Once everything is done, in case a potential client asks for reasons to hire your firm, the most appropriate and effective answer will come out of your mind automatically.