We now all agree that the economic downdraft of late 2008 to the middle of 2010 severely impacted the legal industry. I have contended for some time that client-driven cost saving concerns predated these macro-economic trends and will continue even after a tepid rebound with slow job growth.
While there was not as much legal work the last few years, there was more time to talk about it. A good summary of the state of part of the legal industry comes from the just released Hildebrandt Baker Robbins/Citi Private Bank 2011 Client Advisory. It is available here and is a fine piece of work, written for present and (hopefully) future clients of the sponsors (mostly large law firms). Here is an item from the concluding paragraphs of that report (p. 17), illustrating both the promise and the challenge of change:
Clearly, in the present environment, many corporate clients are looking to their law firms to provide not just competitive rates, but also genuine added value in the services the firms provide. In its simplest form, this may mean offering clients complimentary services â€“ such as secondments, debriefing sessions, shared training programs, and the like. But at a deeper level, it means focusing on legal work processes, project management skills, and knowledge management to insure maximum efficiency in the delivery of legal services.
It is a good summary, it is all true. And at the same time it reads like the syllabus for the latest “Legal Costs 2011: Navigating the New Normal” conference, coming soon to New York, Chicago, Los Angeles, London, Sydney and Hong Kong.
The promise? Bottom-line results. The challenge? Doing it in our lifetime.
Right now, the biggest clients (say Fortune 500 or FTSE 100) and their biggest firms (AmLaw 200) maybe have time to lead with this stuff. For most of the rest, not so much. Some legal processes aren’t worth improving. More than a few legal projects will chafe under well-intentioned micro-management. And there are more legal matters than you’d think which aren’t worth an AFA when you can get lawyers to do it who are GEA (Good Enough Anyway) and also AHOALC (A Hell of a Lot Cheaper).
On Wednesday, I want to give a real-world example of deep cost cutting in action, something that goes way beyond a quick nick at the margin. Friday, I will offer a reason or two why it’s hard to get legal cost control to move from slogans to solutions.