Last month I gave a talk at a University of Pennsylvania Law School symposium on the business of large law firms. It’s a brief summary of some of the challenges in the market, plus a strong recommendation that firms and their clients start developing a “vocabulary of value,” which will help them think differently about billing for services.
Exploring the Economic Realities Challenging the Modern Law Firm
University of Pennsylvania Law School
Journal of Business Law Symposium Feb. 7, 2015
I’d like to start with a word of reassurance.
Despite the various overwrought reports of the past few years, Big Law isn’t busy dying. Parts are being sorely tested, but the present of large law firms is strong, and so is the future, for at least one undeniable reason: Big clients, in all their many and varied forms, need the help of big law firms. They haven’t found a substitute yet. And, to be blunt, most haven’t bothered to look for one.
For all that—and for all the good work that is being done—there is a sense of unease in the practice and business of law. There is so much focus on the price of the services rendered that sometimes I worry whether the transactional part of the relationship, the hiring and paying, is diluting the more important aspect of the relationship, namely the role of the trusted advisor trying to help someone in need.
Some of this is a direct result of the economic dislocation of the last six years. Faced with new demands for cut costs and, occasionally, cut corners, law firms and their clients scrambled to adjust. They didn’t have a vocabulary to talk about the value of their services or, often, their methods of delivery. Instead they fell back on simple arithmetic: Hours times Rates.
Click here to download the entire talk.