It would be easy to attribute the changes underway in today’s law firms and legal departments to the greatest economic crisis in decades. The downturn undoubtedly made its mark, but the fundamental shifts taking place in the legal field today have much earlier roots.
According to research conducted for a new white paper from Robert Half Legal, Future Law Office: Delivering Maximum Value in a Cost-Conscious Legal Era, legal organizations have for some time recognized that many of the traditional approaches to obtaining and delivering legal services are no longer as efficient or cost-effective as they once were. The recession simply brought the need to address these issues to a head.
As corporate legal departments demand more value for their spending, many of their law firms are going through what amounts to an identity crisis. Law firms are recognizing as never before that they need to act like a business as well as a profession.
To ask for more value for their money is hardly an unreasonable request from clients: companies have been demanding more cost-effective services from their suppliers for decades. For reasons likely related to tradition, however, law firms seem to have been excluded from these efforts.
Today that has changed. Legal departments are demanding more predictability, better communication, transparency in billing and improved efficiency. One example of this shift is the Value Challenge launched by a number of general counsel who are a part of the Association of Corporate Counsel (ACC). This group has been hosting meetings throughout the U.S. and worldwide involving in-house and law firm leaders. According to the ACC, the theme that continually emerges is that “it’s all about value.”
Law firms are finding that they must leave behind or modify some long-established traditions in order to remain competitive. As firms reach out for new business, they must more effectively demonstrate how they can bring value to a company. In particular, law firms are finding they must improve their service delivery processes or risk losing money. As a result, they are analyzing the way cases are handled in order to eliminate waste and decrease the amount of time it takes to deliver legal services.
But the onus for instigating change does not fall just on law firms. Both parties – the law firm and corporate legal department – need to make a point of maintaining a frank, open discussion. In an interview conducted for the Future Law Office, Mike Roster, chair of the ACC’s Value Challenge steering committee, suggests law firms implement the Value Challenge’s “Meet, Talk, Act” model: “Call your three best clients,” he says. “Ask if you can talk over a bag lunch about the client’s legal needs, where you’re doing well, where you can do better, how you can improve the quality of the services you deliver and reduce the client’s costs.”
Practices law firms are re-examining and, in many cases, modifying include billable-hour models, lockstep pay, partner compensation, the path toward making partner, and client relationship management. Staffing strategies also are changing. The professionals law firms and legal departments hire play a pivotal role in client relationships, and how teams are composed and compensated has a major effect on an organization’s efficiency, effectiveness and bottom line.
Indications are strong that the profession of law is changing for the better. More organizations know they need to become more efficient, revisit old processes that may no longer work and build nimble teams that can help them cost-effectively deliver quality, relevant service.
Charles A. Volkert is executive director of Robert Half Legal, a leading staffing service specializing in the placement of attorneys, paralegals, legal administrators and other legal professionals with law firms and corporate legal departments. Based in Menlo Park, Calif., Robert Half Legal has offices in major cities throughout the United States and Canada.