The most likely change agent in the legal market over the next 10 years won’t be law firms, according to a survey of more than 300 firm leaders around the country. Respondents expect corporate law departments or technology innovations will be the force most likely to lead change.
Altman Weil released the results of its sixth annual Law Firms in Transition Survey Wednesday, in which it found large firms surpass smaller ones in strategic change efforts.
A majority of law firm leaders responding to the survey agree that greater price competition, practice efficiency, commoditization of legal work, competition from nontraditional service providers, and non-hourly billing are all permanent changes in the legal landscape. For the most part, these are changes that have been imposed upon them from more demanding clients and more competitive newcomers who are challenging the rules of legal service delivery.
Nearly a third of respondents identified corporate law departments and technology innovation as what will drive change in the legal market; 15 percent said non-law firm providers of legal services, and just 10 percent said law firms will take the lead in reinventing the legal market.
The survey found many firms with fewer than 250 lawyers are not making sufficient investments in the future legal market. Nearly half of all firms with 250 or more lawyers report changing their strategic approach to pricing, but only 22 percent of firms with 50 to 249 lawyers are doing so. Nearly 60 percent of larger firms report making significant changes in their lawyer staffing strategies as compared to 41 percent of the smaller firms.
“Larger firms’ bias for longer-term strategic change is most likely a pragmatic response to greater pressure they are feeling from the large corporate clients that larger firms are more likely to serve,” said Tom Clay, Altman Weil principal and survey co-author.
Larger firms are also somewhat more likely to be driven by long-term considerations, including new pricing and service delivery strategies, according to the survey, as opposed to short-term profitability to lock in the firm’s most valuable partners.
The complete survey is available on Altman Weil’s website.