How a Blue Ocean Strategy Can Benefit Your Law Firm
One of the biggest growing concerns that business owners are currently facing is carving out a space for themselves in a market that is already overpopulated.
As the legal industry is notoriously competitive, failing to find your *spot* on the market leaves you vulnerable. It means that you could be sending clients (and by extension, money) directly to your competition.
Thankfully, there are various strategies that you can use to your advantage when establishing your position in the market. This includes developing a blue ocean strategy.
What is a blue ocean strategy?
A blue ocean strategy is designed to help you gain uncontested market space within your chosen industry. This will increase custom while reducing the need for you to compete with other small businesses. As such, it can be an effective way to lower overheads, reduce stress, and put you on the path toward success.
The term is designed to counter the idea that businesses such as law firms must remain hyper-competitive at all stages, as “cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool.”
To apply a blue ocean strategy to your business, you need to find a ‘hidden’ market to tap into – identifying something that your competitors are failing to address and making it your main priority.
How to Implement a Blue Ocean Strategy
In the book, Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne argue that you should use their “four actions framework” to step into your blue oceans (i.e., untapped spaces in the market).
To follow this framework you must:
This section of the framework encourages you to think about which aspects of your business should be raised above current industry standards.
For example, not only is family law a hyper-competitive practice niche, but it is also one that is often very emotionally taxing for the client. You could elevate the level of services in this area by focusing on more holistic divorce practices that encourage clients to part ways peacefully outside of the courtroom. This helps you tap into a more specific market, which could prove useful as no-fault divorces come into force.
This section encourages you to think about areas within your company or services that could be eliminated. This can be a cost-cutting endeavor or a method through which you’re able to focus on the new market you are tapping into.
For example, streamlining your services to offer more niche, specialized support is a great example of effective elimination. This is because you’ll be able to reduce your costs, ensuring that your time, energy, and money are invested into more profitable areas of your business.
This section is similar to its predecessor, but it is instead focused on services or ventures you can pull back slightly without removing entirely. For example, if you find that you spend countless hours on administrative tasks and financial planning – these tasks are making it harder for you to stay competitive as they’re taking up too much of your time.
While you cannot eliminate these duties entirely, you can find ways to reduce the amount of time and energy you dedicate to them – such as hiring a fractional CFO or CEO.
This section is based on innovation and creativity. For example, it encourages you to think about what you can do that nobody else in your industry is doing. In many ways, it’s similar to identifying a niche or Unique Selling Proposition (USP). Gather your team together and come up with as many ideas as possible, paying particular attention to identifying (and meeting) the needs of your clients. This will put you in the best position for success.
Benefits of a Blue Ocean Strategy
Implementing a blue ocean strategy in your law firm can bring around many benefits. For example, this could include:
- An improved workplace culture, as your staff is more focused on providing high-quality services than ensuring they remain competitive.
- Reduced burnout as you (and your team) are no longer chasing unattainable goals to better your competition – as they’ve been rendered irrelevant by your new niche.
- Trimmed operational costs through the elimination of redundant services and systems.
- A sharper brand identity that allows you to build a name for yourself in a competitive industry.
In short, developing a blue ocean strategy will enable you to get ahead of your competition – by removing them from your radar entirely. When you occupy a blue ocean space, you’ve got control over the market – which will make it easier for you to build up a client base and grow your firm.
At FinOp Group, our team of experienced CPAs provides full-service law firm accounting solutions, including tax planning, payroll, budgeting, and billing. This means you can focus on what truly matters, running a stellar law firm. Schedule your free consultation today!