Successful firm management requires an understanding of dynamics not just in the legal market, but also in the markets it serves. Steady long-term profitability depends on knowing where the next wave of revenue is coming from and where to place your firm to catch it.
Which sectors should legal professionals be looking at this year? Which legal services will be in demand? And how can you ride the next wave of market growth all the way to the bank?
Ever wondered how some firms just manage to be in the right place at the right time? It’s no accident. Smart managers know how to spot opportunities that will enable them to rise above prevailing conditions and cultivate a thriving practice – no matter the market.
One such opportunity is presented by growth waves in other sectors. New and evolving industries inevitably require a higher volume of legal work and have the funds for a healthy legal spend. Naturally, firms that can tailor their practices to the particular needs of a growth industry will position themselves well to win the work.
So which industries are ready to grow in 2015? And which legal services do they need?
Mining and resources
The resources sector is expected to see rapid growth as a result of developing coal seam gas (CSG) exports. It is estimated that improved extraction techniques and export capabilities will boost CSG revenue by 148 per cent in 2015 as Australia services demand from Japan, China and South Korea.
This is expected to drive a need for legal services associated with land acquisition, regulatory compliance and general commercial work. The recent repeal of the carbon tax will also provide opportunities for firms to give advice on compliance and restructuring for the new regulatory regime.
Wealth creation and financial services have been identified by Deloitte as one of five “super-growth sectors” with potential to bring significant revenue to the economy over the next 20 years. Australia’s finance market is promising to become a major international centre for investment management in coming years.
This will no doubt forge greater demand for broad-scale commercial advice and transaction work for banking and finance practices. In addition, the pre-Christmas FOFA reforms will provide a bumper window during which advisors will require additional compliance and restructuring advice to get up to speed with new regulations.
Commercial real estate
Positive economic growth in the commercial real estate market is predicted as transactions and lending continue forging ahead and interest of foreign investors and funding options increase. Meanwhile, increased use of technology, outsourcing and cloud storage is redefining the demand for office space.
An increase in front-end property work, including leasing, commercial transactions, finance structuring and property development projects, can therefore be expected.
As always, technological advancements march forward within all industries, enhancing business practices and management tools. As businesses in many sectors attempt to streamline and automate to maximise profits in the coming year, software development and support will show continued steady growth.
A need for legal expertise in intellectual property law and general business services with a focus on online operations will follow. Firms with greater online presence and online service delivery models will be in the best position to market to businesses in this field.
How to get on board
Of course, firms need to be strategic when choosing which waves to catch. Setting up a whole new practice area to accommodate a trend may not be a viable option for your firm, but there are less drastic steps you can take that require minimal investment.
Why not try tailoring an existing practice area to accommodate a growth industry that is adjacent to one you already service? If you have an existing general commercial practice, consider creating a specialist ‘industry-specific’ practice group, which understands and meets the needs of a particular growth sector. Most importantly, don’t underestimate the power of a strategic marketing campaign to pitch your brand into a new target market.
Yes, catching the wave requires a bit of work, but the ride will be worth it.