Fayuan Company
Analysis of the current situation and prospects of the lawyer industry
Reveal new trends in the development of the industry and lead future changes
It can be seen from the "2022 Statistical Analysis of Lawyers and Grassroots Legal Services" released by the Ministry of Justice that although the large-scale process of Chinese law firms is developing slowly, small and medium-sized law firms still occupy a dominant position. Specifically, law firms with 10 lawyers or less had the highest number of 2530,000, accounting for more than 65%. However, the growth rate of this group has been declining in the past three years, indicating the challenges faced by smaller law firms in scaling.
By comparison, there are 8,023 law firms with between 11 and 20 lawyers, accounting for about 20%. The growth rate of a law firm of this size has increased in the past three years, indicating that they are able to adapt to market demand and achieve steady growth to a certain extent.
The number of law firms with 21 to 50 lawyers is 4,037, accounting for about 10%. Law firms of this size have also shown an upward growth trend in the past three years, showing the competitiveness and development potential of medium-sized law firms in the market.
The number of law firms with 51 to 100 lawyers is 784, accounting for about 2%. Although the proportion is not high, the growth rate has also increased in the past three years, indicating that these larger law firms are also actively seeking development opportunities.
Finally, the number of law firms with 100 or more lawyers is 784, accounting for only about 1%. However, due to the small base, the growth rate of these large law firms has exceeded 10% in the past three years, and it will reach 20A significant increase of 48%. This shows that the influence and competitiveness of large law firms in the market are also increasing.
Data**: Compiled in conjunction with the data released by the Ministry of Justice and the Supreme People's Court
Fayuan Company
Lawyer-law firm relationship
The complexity and survival dilemma of the law firm's ecology
With the continuous expansion of the scale of law firms, disputes and disagreements between partners have become the norm. At the same time, the relationship between lawyers and law firms is often contradictory, resulting in lawyers frequently changing practice institutions or choosing to set up their own law firms independently. Against this backdrop, large law firms such as Yingke Law Firm have continued to grow, with more than 14,000 practicing lawyers. However, in stark contrast to the rise of large law firms, 86 of the more than 37,000 law firms in the country82% of law firms have fewer than 20 practicing lawyers, compared to 663% of law firms have fewer than 10 lawyers.
Large law firms have a significant advantage in terms of talent, resources, and client trust. They are able to provide clients with more comprehensive and professional legal services, which can lead to more business opportunities and market share. In contrast, small law firms, despite their unique strengths and characteristics, often only survive in terms of attracting clients and generating revenue, and their brand influence and business competitiveness are relatively weak.
This industry situation reveals the complexity of the law firm ecosystem and the survival dilemma of small law firms. Faced with the competitive pressure of large law firms, small law firms need to find their own development path, improve their professional capabilities and service quality, so as to attract more clients and market share. At the same time, it is also necessary to pay attention to the development trend of the industry and the changes in customer needs, and adjust its own development strategy in a timely manner to adapt to the changes and challenges of the market.
Fayuan Company
Under the polarization of the legal profession
Medium-sized law firms were among the first to be affected
Medium-sized law firms are the first to be affected by the polarization of the legal profession, rather than small firms, for several reasons:
Competition for resources: In the context of limited market resources, large law firms often have a clear advantage in terms of access to resources by virtue of their size and strength. Medium-sized law firms, due to their relatively weak size and strength, may face a lack of resources to compete with large law firms, resulting in limited business expansion.
Brain drain: Medium-sized firms are at risk of losing talent amid industry polarization, where large firms are often able to offer more attractive compensation and benefits packages, as well as more opportunities for advancement. Talent is the core competitiveness of law firms, and the loss of talent may lead to a decline in the quality of business of medium-sized law firms.
Lack of brand influence: Medium-sized law firms may have a disadvantage in terms of brand awareness and influence compared to large law firms. Brand is often one of the important factors for clients to consider when choosing a lawyer, so mid-sized law firms may face difficulties in attracting clients.
Limited ability to innovate: Innovation is an important driver for law firms. However, mid-sized law firms may struggle to match larger firms in terms of innovation due to size and resource constraints, which may lead to a lack of competitiveness in terms of business models, service quality, and go-to-market strategies.
While industry polarization also has an impact on smaller law firms, it is often the first to be affected by industry polarization as medium-sized law firms face greater pressures on resources, talent, branding, and innovation.
2024 Lawyer Industry Trends**
Law firm mergers: Mergers are becoming bigger and more frequent
System reform: pay more attention to knowledge management, operation management, customer management, compliance and control
Layout of branches: first-tier and new first-tier city layout, international layout
Scale: the subdivision of legal services, team operation, and the upgrading of the legal service chain
Cost structure adjustment: Salary lawyers, partner lawyers, non-litigation business and market launch budgets are affected
**Crowded with live tracks: There will be more and more lawyers and law firms flocking to live broadcasts and short tracks
Digital innovation and development: mainly reflected in the provision of case sources, customer acquisition, and industry competition investigation
Fayuan Company
Lawyers need to seize the trend and create an invincible advantage
1. Become active: The passive market customer acquisition method must be transformed into an active market customer acquisition method, and relying on traditional referrals has been unable to adapt to the upgrading of the legal service chain and the growth of customer demand.
2. Recognition marketing: Lawyers need to demonstrate professional knowledge and service advantages to win the trust and recognition of clients. Senior lawyers should recognize the importance of marketing in the modern legal services market and guide young lawyers to enhance their visibility and competitiveness.
3. Focus on customer experience: With the intensification of market competition, the space for customers to choose lawyers continues to expand, and their expectations for service have also increased. In order to earn the trust of their clients, lawyers need to focus on the customer experience and strive to improve the level of customer service.
4. Teamwork: In the ever-changing market environment, the living space of individual lawyers is gradually being squeezed, and they may face the risk of being eliminated in the future. Teamwork has become an inevitable trend, and lawyers need to be part of the teamwork to jointly respond to the challenges and opportunities of the market.
5. Switching to small and medium-sized law firms: With the innovation of the personnel structure and business structure of the head law firm and the red circle law firm, some lawyers cannot continue to stay in office after reducing costs. If you have good business capabilities and a relatively stable source of cases, you can try to switch to small and medium-sized law firms and build high-quality small and medium-sized partnerships together.
6. Find vertical, innovative market segments that others have not discovered for the time being, and create corresponding differentiation: In the legal service market, it is crucial to find innovative and differentiated segments. Taking our partners as an example, they focus on handling economic dispute cases of less than 100,000 nationwide, and achieve low-cost transformation and high-efficiency mediation through the innovative non-lawyer mediation model in the early stage, and lawyers from all over the country participate in case filing and litigation cooperation in the later stage. This market segment positioning and service model makes them stand out in the highly competitive legal service market, with a monthly turnover of more than 20 million.
7. Flexible adjustment and cross-border linkage: Law firms in Beijing and Shanghai continue to expand their service scope and improve market coverage through downward penetration. Large-scale urban agglomerations form a strong market synergy through internal agglomeration and external linkage, further consolidating and enhancing their competitive advantages. For lawyers, adapting to this market change requires a flexible market strategy and business model. On the one hand, it is necessary to pay attention to the needs and characteristics of the local market, gain an in-depth understanding of the local legal environment, and provide targeted services. On the other hand, it is necessary to actively seek cooperation with lawyers, law firms, and other non-governmental organizations inside and outside the urban agglomeration to jointly build a broader legal service network and enhance market competitiveness.
Fayuan Company
Law firms should be grounded in the present
Firmly grasp the long-term trend of industry development
1. Find the right positioning: Large law firms provide customers with more comprehensive and refined legal services to meet the diverse needs of customers by bringing together lawyer talents and resources in various professional fields. China Criminal Law Firm provides differentiated legal services, and small law firms provide flexible legal services.
2. Brand effect: In the context of the still existing information asymmetry, brand plays a vital role in the choice of lawyers for clients, and law firms should pay attention to brand building and enhance their popularity and credibility to attract more customers and win their trust. Whether it is to create a famous law or a famous firm, friends who don't know how to measure are welcome to add me to WeChat**.
3. Establish a mentoring mechanism: The lawyer industry is in the stage of coexistence and integration of the old, middle and young, and senior lawyers should actively impart experience to young lawyers, provide guidance and support, and help them grow rapidly. At the same time, young lawyers should also be humble to learn from senior lawyers and continue to absorb knowledge and experience.
4. Encourage innovation and development: Young lawyers usually have a stronger sense of innovation and learning ability, and they can improve their work efficiency and quality through new technologies and methods. Therefore, young lawyers should be encouraged to give full play to their own advantages, continue to explore and innovate, and promote the development of the legal profession.
5. Establish an incentive mechanism: In order to stimulate the enthusiasm and creativity of lawyers, an effective incentive mechanism should be established to reward and commend lawyers with excellent performance. This can stimulate lawyers' enthusiasm and sense of belonging, and promote the healthy development of the entire industry.
6. Pay attention to talent training and introduction: The development of the lawyer industry is inseparable from the support of talents. Attention should be paid to the cultivation and introduction of talents, and the level of the entire industry should be improved through the establishment of a sound talent training mechanism and the introduction of outstanding external lawyers. Law firms can quickly introduce talents by absorbing and merging and introducing established teams.
7. Improve resource management and business collaboration capabilities: continuously improve the management system, allocate resources more efficiently, including human resources, customer resources and professional technology, and expand business areas and market space through internal market mechanisms.
8. Try and speed up integrated operation: establish a sound management system and process to ensure that all branches follow unified standards and norms. Secondly, strengthen internal communication and collaboration, promote information sharing and experience exchange, and improve work efficiency.
9. Pay attention to customer relationship management and improve customer stickiness: effectively track customer needs and feedback, so as to better meet customer needs and improve customer satisfaction. By continuously optimizing the client relationship management system, the law firm can establish a long-term and stable cooperative relationship with its clients, and further enhance the brand image and market competitiveness of the law firm.
10. Introduce professional managers: professional managers have professional management knowledge and experience, which helps to improve the management efficiency of law firms.
In my personal experience, for example, in the course of the development of the law firm, we have experienced the leap from zero to 100. Knowing the difficulties of law firm transformation, we have successfully transformed from a traditional matrimonial law firm to a corporatized law firm. During the epidemic, I personally achieved an invitation rate of more than 54%, and the team invitation rate also reached more than 35%. The unit value of our litigation cases exceeds 60,000 per stage.
As a law firm specializing in administrative litigation, we built a marketing team from scratch and faced with a large number of partners and business orders.
First, the dilemma of limited budget. In order to overcome the difficulties of the transformation path due to the intervention of multiple leaders, law firms must keep up with industry trends and try to diversify, specialize and brand their development paths.
In the process of development of international law firms, we pay more attention to market operation and the development of blue ocean markets. Our Blue Ocean Market ROI has reached an astonishing 1:35 or more.
Among the law firms that our company docks, individual law firms, small-scale law firms, central law firms and head law firms can be successfully transformed one after another, among which there are professional managers who have a team of professional managers, who have market sensitivity, wolf spirit, service awareness, execution and leadership ability that most lawyers do not have.
11. Build a middle office service center: In the new development stage of the law firm industry, the core competence of law firms has become a key factor in their competitive advantage. This capability is embodied in different law firms, including but not limited to the middle office, service center, management operation center and call center. Through these service centers, law firms can integrate resources more efficiently, optimize service processes, improve service quality, and meet the diverse needs of clients. At the same time, these institutions also help law firms to form their own professional characteristics and service brands, and further enhance their market competitiveness.
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