The great distraction: the innovation bandwagon has hobbled law’s market forces
November 06, 2018
Change and innovation in any market is hard, but in the legal market, where corporate legal spend is controlled by a handful, to say it is slow is an understatement.
I hear and often feel the frustration Alex details in his piece. Halebury is a regulated law firm in the NewLaw space. We have shaved more than 50% off our fees through our lean operating model whilst still providing an excellent value proposition for clients. However, as much as in-house teams talk about how much they want change as well as cost transparency, quality, commerciality, consistency, client service (all of which of course we provide), existing relationships and the brand of a law firm can often still be the basis for instruction. This makes any change hard – how do you genuinely innovate when it comes to your legal services buying when your focus is so narrow?
I agree – there needs to be clear information on the reasonable spectrum of costs, but clients needs to think outside of the box.
But ultimately such considerations speak to the oddity of the debate around innovation in the profession. Here is the fundamental: law firms are driven by two markets, the labour market and the client market. Ultimately, in most mid-level and all high-end institutional legal services, the labour market, being far more liquid and transparent, is the dominant force. Less so than ten years ago, but dominant still. Greed is not the primary driver for law firms to chase sky-high profits, for such firms partner profits are the institutional share price they feel (with some justification) they need to retain their top people.
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