Facing Uncertainty In The Legal Market With Confidence & Insight

What is a player in today’s legal market to do? Lead fearlessly with confidence.

ATL_aLeaders today are savvy, educated, and bold in many respects, and they know about working through uncertain times.

Leaders today know that confidence is paramount; they lead with knowledge and insight and utilize the right teams and tools to confront whatever challenge they may face. Their fearlessness in today’s market comes from that confidence.

The legal market has evolved rapidly over the last decade, much of that sparked by the surging power of clients. And that leaves plenty of room for the unknown to creep into our consciousness.

Three dominant themes have emerged as chief among clients’ desires: Efficiency, Predictabilityand Cost Effectiveness. Clients want to see value for their legal spend. They are no longer content to see billable hours mount up while their lawyers explore every possible avenue. This leaves their lawyers in a bit of a conundrum. Lawyers must be zealous advocates while at the same time being sound fiscal stewards.

In recognition of the need for greater cost effectiveness and predictability regarding pricing, alternatives to the traditional billable hour model increasingly are sought. But there can be uncertainty here as well. Clients do not necessarily understand the implications of various alternative fee arrangements (AFA) may have for their businesses. Law firms, for their part, are concerned that AFAs may be less profitable for them than traditional billing.

Client desires are creating a revolution in the delivery of legal services, too. Alternative legal service providers (ALSPs) have become a true force in the market — and that can be another source of worry. Approximately $8.4 billion of today’s total legal spend is going to ALSPs. Compared to the total value of the U.S. legal market, this is relatively small, but it is a growing portion. It represents work that law firms are now losing or never even had a chance to win.

As clients disaggregate work into component parts, looking for the most cost-effective options, law firms may lose their control over the client relationship. Firms today may do only a portion of the work, becoming just another “vendor” in a long matter supply chain. And about 29% of corporations report decreasing their use of outside counsel in 2016, further dampening demand. This trend saw the average lawyer billing about 144 fewer hours in 2016 than a decade before.

This all combines to paint a picture that could easily push a legal executive to want to stand firm on seemingly solid ground. The problem is the ground is far from solid. The legal market is evolving whether a law firm or a lawyer chooses to act accordingly or not. There is no such thing as status quo when a situation is not static to begin with.

So, what is a player in today’s legal market to do?

Lead fearlessly with confidence.

Yes, lawyers are billing fewer hours today, and efforts at efficiency could, in the short term, compound this. But firms can find new avenues to profit by exploring innovative service delivery models, focusing on outcomes rather than inputs, and emphasizing profit rather than hours billed.

Yes, pricing can be difficult and risky. But clients value counsel who partner with them, learn their preferences, present options, and even educate them a bit.

Yes, ALSPs are taking market share in an otherwise flat market. But the rise of ALSPs present opportunity to diversify services while controlling costs. Firms could help integrate these new players into clients’ legal supply chain.

Fearless leaders are confident leaders. They don’t lead recklessly. They are secure in their own knowledge and insight and deftly employ the teams and tools to confront industry challenges. They do this every day.

These leaders don’t shy away from market problems. They pursue the best solutions to better continue navigating their firms and law departments with fearlessness, confidence, and security.

Learn how you can lead fearlessly with tailored legal solutions designed for you.