Is your firm changing its business model, or is it in a stage of failure?
Oct 24, 2013
By Edwin B. Reeser
The market dictates change. Sometimes it moves toward you, sometimes away, but whichever direction, it behooves those who are beholden to the market—which is just about everybody—to get in step or get run over.
The Am Law Daily reported this week on a LexisNexis study indicating law firms of 750 lawyers or more are losing market share to law firms of 200 to 500 lawyers that charge lower rates. Big-ticket litigation matters in particular are being lost to these "large enough" firms.
This isn't a flash bulletin about a new development. The inevitability of this change has been widely written about from all corners of the legal industry for years. What the article does however, is bring more clarity to the importance of our ability to differentiate between what kind of change have we been making for ourselves and what kind of change is being made upon us by others?
The change that is being directed by the market is simple and clear. The market demands and will drive to achieve a better value proposition than what law firms have delivered in the past and are now failing to deliver in the present. The client message in this market is unmistakable: "If you cannot give me what I want, I will move my purchasing to someone who can and will give me what I want." Just like every other service and product market. The article refers to several reports that demonstrate there is clear data that this dynamic has been underway for several years, and now is material both in size and scope.
Firms that are able and willing to change their business models should retain the business. Those that cannot or will not won't retain the business. No firm is immune from this pressure. Then, what happens to the firm that does not adapt? It isn't a trick question. They will be changed, but they probably won't be in command of the process. They may survive it, or they may not.
(Reprinted with the consent of the ABA Journal, copyright 2013)
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