The 2015 Altman Weil Flash Survey: “Law Firms in Transition” was recently released, revealing how the legal market is changing and identifying the emerging forces that will move it forward — “whether law firms are ready or not.”

Of particular note was the No. 1 reason law firms aren’t doing more to change the way they deliver legal services: “Clients aren’t asking for it,” said 63 percent of those surveyed, followed by 45 percent stating, “We are not feeling economic pain to motivate more significant change.”

Also significant: 67 percent of law firms say they are currently losing business to corporate law departments that are in-sourcing legal work. As the survey comments:

“Clients may not be asking for change — but they are showing law firms that they can and will take alternative measures themselves to achieve greater efficiency and economy. In other words, if clients can’t buy it from law firms, they’ll build it themselves.”

What happens when a law firm pursues change in efficiency of law service delivery?

More than 75 percent indicated that gross revenue increased. The survey continues to highlight that pricing strategy has a lesser impact than the efficiency of legal service delivery.

The survey further notes:

“Clients must be the center of your strategy. Not changing more because ‘Clients aren’t asking for it’ is a terrible mistake. Don’t wait for clients to ask — instead demonstrate to them that you understand what they want (or that you want to find out) and are willing to do what it takes to deliver. Do the work to define your firm’s legitimate, meaningful, differentiating advantages and communicate them.”

In order to better understand what clients want, there are firms who are proactively initiating certain activities. For example, 84 percent initiate “conversations about pricing / budgets”; 68 percent have “conversations about project staffing”; and 64 percent make “management visits to key clients.”

Additionally, 68 percent identified non-traditional hourly billing and AFA usage as typically reactive. Interestingly, “firms that are proactive in their use of AFAs are much more likely than reactive firms to say their non-hourly work is at least as profitable as their hourly work.” Specifically, 48 percent found it “as profitable” and 29 percent found it “more profitable.”

The trend, therefore, is two-fold: 1. Firms must respond to their clients and change or lose business; and 2. Firms that are proactive and control the change / conversation are more likely to benefit / profit.

To these points, the survey states:

“As demand returns, firms will still have to hustle, be lean, be businesslike, and understand and deliver client service and value to outperform their peers. Firms that have begun change efforts will need to stay the course and avoid complacency. For the rest, it’s not too late to begin. But in the absence of serious strategic change, the gap between higher and lower performers can be expected to widen.”

The survey also notes that making changes is “not about business development or ‘making your numbers.’” It’s about reviewing how work is done and priced, and examining client relationships and service delivery. The key to these changes and strengthening a firm’s foundation is committed leadership.