Large law firms, particularly U.S.-based firms, have enjoyed a string of relatively successful years. Am Law 100 firms, and in particular those firms in the Am Law Top 50, have led the market in such important metrics as demand growth, rate growth, and productivity for most of the past three years, according to data analyzed by Thomson Reuters Peer Monitor and the Legal Executive Institute.
But even as the largest firms widen the gap between themselves and other potential competitors, it is no time for them to rest on their laurels. Indeed, it would be wise for leaders of large law firms to continually re-evaluate and better align their resources and capabilities with the needs of their customers.
In recognition of this, Thomson Reuters this year is creating a more focused Large Law Firms customer segment, and I am excited to be leading this new global initiative.
With that in mind, I also wanted to offer a few suggestions for some resolutions that large law firms may want to consider as they kick-off the new year:
1. Consider what “must haves” you really need — The hype surrounding emerging technologies continued apace during 2018, and there are no signs of a slowdown anytime soon in the coming year. There is no doubt that technologies such as artificial intelligence or blockchain can, and are, having an impact on the way global law firms are operating. A resolution for 2019 would be to recognize that these “must have” accessories are only enabling technologies — they are not the solution on their own. Firms need to identify the right use cases, form a clear view as to what they are trying to achieve, have access to the highest quality and best-structured data, and properly plan for and invest in change management to ensure a successful implementation and adoption. The right “must have” solutions will move the needle forward for each of these.
2. Be stronger together — We’ve seen many newer functions evolve across law firms within the past few years: innovation hubs, automation teams, legal project management, process improvement, pricing, etc. All these groups are having varying degrees of impact on the delivery of legal services, profitability, and client satisfaction. So how best to position these functions for success in 2019? We’re seeing a number of firms collate these groups together under a common leadership, forming something akin to a legal operations function within the law firm. Even without common leadership, close collaboration among these teams is essential for the progress of the firm. Indeed, the very existence of these interdisciplinary, allied professional teams is one of the greatest differentiators between large law firms and their smaller competitors in terms of value delivery. If your firm has them, use them wisely to differentiate your performance and client experience. If you don’t, are you missing out on something your competitors are leveraging?
3. Don’t assume “bigger is better” — The size and scale of global law firms offers many advantages, but those advantages come with no guarantees. There may be a temptation to think that large law firms are immune from competition from smaller firms, but this is not a safe assumption. The Legal Executive Institute took a look at a sample of 30 litigation-heavy members of the Fortune 50 and found that fully 24% of the litigation work from these major corporations was handled by smaller law firms with between two and 15 lawyers. If your immediate response to this is, “Well sure, but what kind of work is it?”, then my response would be, “Does it matter if it can be done profitably and serve a larger share of your client’s needs?” Corporate counsel are making no secret of their willingness to move work down-market in search of better value via lower cost. Global firms, however, can deliver better value by leveraging their inherent advantages. But don’t overlook potential smaller competitors — instead, strategize about how to out-compete them.
4. Remember what got you here — The level of service delivered to clients by many of the top national and global law firms is second-to-none in many respects. Law firms cannot lose sight of this focus. Top-tier expertise, a deep understanding of client issues and concerns, high-quality outputs, successful outcomes, and trusted relationships are why clients have continued to drive ever more business to large law firms, even as these same firms continue to push their already high rates higher. While clients may be looking for more “cost effective” solutions, they are showing no signs of wanting to compromise on quality, outcome, or expertise. Large law firms can capitalize on this to continue their winning streak in 2019.