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When you bill by the hour, a business interruption may place your entire revenue stream on hold. That's why in addition to covering claims for expenses and lost revenue, our risk control programs can help you learn how to reduce or avoid exposures in advance.

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While managing confidential electronic data is essential to serving your clients, it also exposes your practice to a higher level of risk. Our Cyber Liability products cover you and your business in the event of claims from lost or compromised information or data.

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You rely on your experience to provide advice, but you also depend on the tangible aspects of your firm. That's why we offer tailored coverages for key exposures from Building and Personal Property, General Liability, to Auto Liability, Umbrella and Crime.

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Any employee action may have an unintended impact on your business. That's why we cover exposures such as employment practices liability, directors and officers liability, plus workers' compensation for professional service firms.

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Published Tuesday, July 18, 2017

Leaders of small law firms are facing significant challenges that affect how they meet increasing market demands. According to the Thomson Reuters Legal Executive Institute, firms of 29 attorneys or fewer generate $108 billion of an estimated $437 billion legal market, a number that is expected to grow as businesses and consumers look for quality representation at favorable price points.

Small law firms will find that meeting these challenges can generate exciting opportunities for business growth — but only if appropriate strategies for such growth are developed. According to the Thomson Reuters "2016 State of U.S. Small Law Firms Study," respondents identify the top three most significant challenges for small law firms:
 

  1. Acquiring new business: This economic demand was cited by 78% of respondents, primarily due to increasing competition for market share. The top source of competition is from firms of similar size, followed by large firms.

    Interestingly, respondents identify individual consumers acting pro se and legal self-help or DIY sites as sources of competition. The report cautions against overlooking these sources, as DIY sites create savvier client pools.

    Of those firms that recognize this challenge, only 37% have implemented measures to address the issue. By working to build a brand and effectively marketing their services, law firms can implement strategies to attract new business. Apart from creating a brand, a law firm might promote the ways in which the firm is different from its competitors. These strategies can foster client loyalty and also avoid inevitable rate pressure (see No. 3).
     
  2. Spending too much time on administrative tasks: Where does the time go? Small law firms say that their days are occupied with administrative work, instead of practicing law. Regardless of firm or business type, 69% of respondents say these responsibilities create substantial time management concerns.

    Thomson Reuters notes that when these results are cross-checked with the small firms' measure of success, those that identify themselves as "unsuccessful" or "neither successful nor unsuccessful" are more likely to say that excessive time devoted to administrative tasks represents a significant challenge. At 31%, this number is greater than the response from firms that are "very successful" or "successful" (24%).

    A mere 19% of those firms surveyed have implemented changes to address this demand. One simple —and possibly, overlooked — way to confront this issue? Leverage technology. In fact, firms identified in the report as "very successful" were most likely to use software and tools, such as conflict checking, case/matter management, financial management/accounting, document management, document drafting, e-signatures and knowledge management.
     
  3. Client rate pressure: Across the board, small firms face pressure from clients to deliver more for less cost, with 62% of small law firms reporting that this demand imposes increased stress upon firm management. Firms of 7 to 10 attorneys are most likely to be affected, with 73% of these respondents agreeing that client rate pressure is a challenge.

    "More than ever before, some clients, particularly institutional clients of the type served by full service and boutique firms, are implementing billing guidelines restricting the number of hours for which they will pay for tasks like research, or eliminating those hours all together," Thomson Reuters says. Because of this, it's worth considering a move away from traditional billable hours and law firms might carefully examine the potential for handling the matter for a flat fee. An agreed-upon flat rate provides the client with predictability, placates potential tension in the attorney/client relationship and also frees up the firm's time.
     

Other challenges that small law firms face according to the report include technology, cost control, keeping up with legal and regulatory changes, lack of internal efficiency, information overload and succession planning.

All of these challenges present increasing complexity to the ways in which small laws firms conduct business. Attorneys sometimes overlook the importance of managing their firm as a for-profit business, as opposed to the day-to-day practice of law. Those firms seeking to achieve future success will address these challenges as opportunities to be more competitive in the legal marketplace.

Insurance for Professional Services Providers

CNA is the nation’s leading insurance provider of professional liability insurance. When it comes to protecting your business, you want an insurer with the financial strength, industry experience and a broad portfolio of products to meet your unique insurance needs.

We understand the complex challenges of serving your clients and growing your business. CNA is the preferred carrier for professional liability programs for the National Association of Realtors (NAR), the American Institute of CPAs (AICPA) and the National Society of Professional Engineers (NSPE). CNA is also the endorsed carrier of nine state bar associations, and we’ve been named Best Specialty Lines Insurer by Intelligent Insurer.

Our Underwriting, Risk Control and Claim professionals have an average of more than 20 years of experience working with professional service firms, and our tailored industry-specific coverages are designed to meet the needs of your practice. CNA's educational programs, designed specifically for professional services firms by professionals with practical experience in the designated professions, have received wide recognition in the industry.

To build on your current success, you must be prepared to face risks or challenges to your reputation and bottom line. And when it comes to your business’ risk management insurance, the coverage you seek – from data protection to cyber crime, to workers’ compensation to lawyer’s professional liability – could just make or break your business’ progress and reputation.

For more than 50 years, we’ve offered more than just a policy — we deliver expertise that helps professionals tackle their challenges and risks through professional liability insurance.

Products

Learn more about our broad portfolio of insurance solutions specialized to meet the needs of your business.

CNA offers a broad portfolio of insurance solutions — from general liability to property to professional and management liability and more — specialized to meet the needs of your business.

Services

Explore our services designed to help you manage your claims, understand your exposures, address potential losses and maintain business continuity.

CNA offers an array of services designed to help you manage your claims, understand your exposures, address potential losses and maintain business continuity.

Business Insurance Fundamentals

Learn more about how to identify the insurance and services you need to safeguard your business.

Are you looking to learn more about the kinds of insurance coverage you need before you contact your local independent agent or broker? We've developed some helpful resources and tools to get you started.

What kind of insurance do I need?
Identifying the right coverages that address your risk exposures and your greatest challenges is important. To help determine your business insurance needs, use this checklist to help guide your discussion with your independent insurance agent.

What is risk control?
Preventing and controlling risk can be just as important as being properly covered. CNA Risk Control offers a wide range of services focusing on management accountability, cost drivers and business solutions to help you improve your bottom-line profit.

Why use an independent agent?
Dedicated to offering the broadest selection of policies and coverage to best meet their customers' needs, independent agents represent multiple product lines from more than one carrier. CNA is proud to support the Independent Insurance Agents & Brokers of America and their Young Agents Committee. Find a local independent agent for you.

How can I prepare for an emergency?
Learn how to safeguard your business, your employees and your family in the event of an emergency by visiting Resources to Manage & Reduce Risk for online tools and resources from CNA's own business continuity planners and government organizations.

How can I better prepare for my policy renewal?
Your independent insurance agent is your best resource to ensure your business has the proper insurance coverage as it changes and grows year over year. Review this list of 10 items to prepare for your conversation about how your business and its insurance needs have changed since your policy was issued.

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