This is how change happens in law firms: clients demand a different approach and law firms react. Today’s business model is driven primarily by the billable hour. As clients’ budgets demand cuts in legal spending, clients will force firms to think creatively about ways of shrinking the bills. Note that this article is not about Ford talking with tiny firms – the conversation was between Ford and several “magic circle” firms in London (the magic circle is the term that applies to London’s five largest law firms).
There will be two effects from this, one is noted in the article. One insider said, “There were firms at that meeting that won’t get business in the future.” Inevitably, clients will consolidate their business among a smaller group of firms. A byproduct of this however is that the firms who are in the consolidated group could easily see their revenues from the client go up. In other words, fewer firms sharing a smaller pie may nevertheless see increased revenues.
Ultimately, firms are faced with this reality and must find a way to react. The best way to make lemonade here is to fashion a business model that leverages the above scenario. How do you do that? Lower your cost of sale (through better marketing) increase efficiencies internally (through knowledge sharing).
Yikes – that sounds like a business. Now wouldn’t it be nice to see firms being proactive and actually suggest these changes? Never forget Jack Welch’s Six Commandments…