Building the Perfect Beast

Jordan Furlong of Edge International says that the economy is not turning around and the we have entered a time of new realities for law firms.

What’s going on?

Segmentation

is going on in legal work, and is becoming stratified. Each strata will have different price points and different relationship needs.

Mission critical work, from the client point of view, is work they wish they did not have to award. Clients think it definitely matters who they hire and they want the best…skills and reputation, for protection of the decision. Money is no object.

Ordinary course of business, where they need a lawyer, but it doesn’t really matter who they hire to do this work. Their biggest leverage is the cost.

Commodity work, may not need a lawyer, but if they can get the work done for the right price and the lawyer is who does it, that’s fine.

Law firms must decide in which tier they should be, and they all can’t be in the mission critical work. The area of need is too small. If the firm doesn’t choose a segment, the market will choose one for them.

Another trend is the development of alternative providers of legal services, and may not actually have a lawyer involved.

Some focused on small and consumer legal services. Low risk work.

Legal process outsourcing companies, usually based outside of North America (India, for example) who do “entry level” legal work that might have gone to associates. Can cut 85% of cost, and they do the work well. Law firms see these as competition. Clients see them as options.

What to do?

Invest in systems.

Abandon the clock.

• clients care about outcomes
• clients care about price
• the rest is irrelevant

Rethink legal talent

• law schools are built to produce teachers of law
• grades are a poor metric of lawyer success