Pre-Paid Legal Competition
Now Viewing Pre-Paid Legal's competition in: Legal Services (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What is the firm's primary customer base? - Law firms may cater mainly to individuals, businesses, or government clients.
What balance does the firm like to maintain between established and new clients? - Firms generally seek to bring in new clients to supplement business from established clients.
How dependent is the firm on its major clients? - Smaller firms often depend on a few large clients.
How important are retainer agreements to the firm? - Retainer agreements provide ongoing revenue and allow clients readier access to the firm.
What types of marketing and advertising does the firm do? - Advertising is more common in the legal services industry than in past decades.
How does the firm determine its billing rates? - Rates depend highly on expertise and competition.
How much do billing rates change with the state of the economy? - Law firms, particularly small or specialized ones, depend highly on the local economy and specific industries.
Competitive Landscape
Demand depends on the volume of commercial and civil legal transactions and court and criminal cases. The profitability of individual firms depends on the partners' reputation and ability, and effective case management. Large firms have advantages in serving corporate customers with a wide range of needs. Small firms can compete successfully providing specialized expertise or superior outcomes and operating in a local market. The industry is labor-intensive, but employee contribution is high: average annual revenue per worker is about $165,000.
Business Challenges
CRITICAL ISSUES
Dependence on Local Economy, Specific Industries - Law firms with a large transactional business, such as for real estate or financial matters, are strongly affected by swings of the local and national economy. US GDP, an indicator of potential demand for legal services, can fluctuate up to 5 percent yearly; law office employment, a reflection of demand, can vary up to 3 percent. Changes in local demand for transactional services affect the amount of business law firms do, which impacts billing rates and employment levels.
Specialization Brings Higher Fees, Risks - Rising costs and competition lead general law practices to enter more specialized areas of law. Specialists' fees are typically higher than generalists' and less competition exists in a given market. Specialization carries greater risks, however, as specialists suffer when consumer or commercial activity declines in their area of law. Specialists' fees contributed to US consumer costs for legal services rising more than 50 percent in a recent decade, double the inflation rate.
Industries Where Pre-Paid Legal Competes
- Business Services
- Legal Services(primary)
