As much as SWOT analysis is beneficial tool to any enterprise, it is also beneficial to law firms since most lawyers aren't well-versed.
SWOT analysis for law firms is a very crucial analysis tool that helps law firms achieve their goals and be successful. This is simply because having a better understanding of your position in a competitive landscape (such as the legal sector) is necessary. This beneficial facet is brought by SWOT analysis.
As much as this analysis tool is beneficial to any other enterprise, it is also beneficial to law firms. Another thing to remember is that lawyers are good at making effective legal arguments by analyzing cases. But are they good at the business side of things?
Well, when it comes to the basics of a successful business, most lawyers aren't well-versed, which is why they need this analysis tool.
And so, before we dive into how to do a swot analysis, let's first start by understanding what swot analysis is.
What is SWOT analysis?
SWOT is an acronym for Strength, Weaknesses, Opportunities and Threats. Therefore, SWOT analysis is a tool that allows you to objectively identify and analyze the Strengths, Weaknesses, Opportunities, and Threats of your company.
When doing this swot analysis of the legal sector, you will need to assume your clients' point of view or perspective. This means you will have to step out of yourself in order to have an objective and clear picture of your overall firm's abilities without being predisposed.
With that said, let's now see how to perform a SWOT analysis for law firms:
How to do a swot analysis for lawyers
To perform a SWOT analysis for lawyers, you will have to start by drawing a SWOT analysis diagram which is usually made of four boxes. It's simple. You can simply take a pen and paper and split the paper into four boxes, with each box given a heading according to the four aspects of analysis.
After doing that, you can now use the questions given below to objectively examine each analysis aspect.
Document your strengths
To effectively examine your area of practice or firm's strengths, you will need to start by documenting your law firm's strengths. This means looking at the strong internal points that are like pillars to your business. These strength points in your law firm are the assets that keep persisting regardless of the effects from the external environment. In such an analysis, strengths are measured in terms of capabilities or personnel. To discover and analyze these points, you can use questions like:
- What is your law firm doing better compared to others?
- What is the greatest reputation of your company?
- Do you have very experienced and talented employees?
- What makes people choose you as their representative?
- How convenient is your service provision?
Highlight your weaknesses
First of what is a weakness?
Well, in this context, weaknesses are things that diminish your firm's competitive advantage. For example, operational deficiency or lack of strength in a specific part that your competitor excels in are some of the weaknesses that may exist. To discover your firm's weaknesses, you can also use the following questions:
- Is your employee turnover high or low? – It should be low
- What's your firm's cost structure? – high-cost structure is a weakness
- What is your brand reputation?
- What is the cost of customer acquisition? – high cost isn't favourable.
Identify your opportunities
To maintain your law firm's growth, you will need to identify and analyze existing market opportunities. It is a notable fact that the difference between mediocrity and breakthrough success in business is having accurate managerial foresight. Because of this, you can keep a keen eye on the evident and unseen market opportunities that may grant a better competitive advantage.
Examples of these market opportunities may include:
- Easing of government regulation
- The release of new advance and potentially business-changing technologies
- Forming a partnership with a more established firm
- Competitor elimination from a competitive marketplace
To finalize the analysis for this aspect, you should answer this question: What other things do you think your firm can and should do? This question is essential in that it gives a chance to take a critical look at your strengths and weaknesses and come up with one, two or more profitable ideas.
Discover the potential threats
The external challenges facing any business are usually considered as potential threats. These factors either exacerbate the existing weaknesses or undermine your firm's strengths.
For example:
- If businesses shift or close their operation in a specific area, then the law firms that grew rich due to their existence will lose customers.
- A business offering high priced premium services might be at the risk of new reputable law firms that may join that marketplace with cheaper services.
- Lack of enough personal
- Having ethical violations accusations
- Lack of enough resources to handle clients' requests can easily dent a law firm's reputation
- A stagnant economy may threaten a law firm on a macro-economical level.
Since we have now discussed everything about swot analysis for lawyers and law firms, how can you make the best out of your swot analysis? Well, below are the tips to help you specifically with that.
Tips For Performing an Effective SWOT Analysis
There are five essential tips that will help you utilize swot analysis of legal sector, and they include:
- Be objective with your judgements
Objectivity is the first step to fixing a problem. Therefore, it is important to admit a problem instead of sugarcoating it.
- Ask for help
I don't mean crying out for help. What I mean here is asking for feedback around the office regarding each aspect of your analysis. For example, asking for opinions from a receptionist can help you identify something that you never knew existed or regarded as important. Feedback should not only be from your employees but also your clients regarding their satisfaction with your services.
- Be precise and detailed with your analysis
Having a well-researched threat is more valuable than having a vaguely described threat. However, this doesn't mean you should avoid vague threats altogether. Instead, it would be best to critically analyze that threat to understand it well.
- Do in-depth research, listen and learn
Several SWOT analyses for the law sector have already been done and published on different websites online. So, it would be ideal for you to search and check them out to help you complete your SWOT analysis.
- Rank factors on each aspect
Prioritizing or ranking each point in order of importance is another key to getting the best out of your SWOT analysis. For example, when it comes to listing strengths, start by listing the most important points of your law firm, then finalize with the less significant points. This strategy allows us first to address the high priority factors, which can be very incremental.
Final Thought
The key takeaway here is that you should give them as much time as possible when analyzing threats and opportunities. This is simply because these two external factors are very crucial for the success of your business. Threats can easily harm your practice if you fail to identify, analyze and provide an effective solution for them.
Finally, check out legal portal Lawrina to learn popular legal topics that might help you with your SWOT analysis.
