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. By examining its strengths and weakness, and the opportunities and threats presented by the marketplace, it can position itself for greater success,
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 reputation likely will look there first.
Similar to 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.
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.
Watch for 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 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 growth and develop a strategy to mitigate weaknesses and overcome potential dangers to business.