December 9, 2013
That does not seem to be the case anymore.
A recent article in the Harvard Business Review asked whether “law firm pedigree” was “a thing of the past.” Prompting this provocative question was a recent survey that found 74 percent of general counsel at 88 “major companies” would be willing to move business away from their trustworthy standbys to other firms, even if they were smaller and unfamiliar, for a 30 percent cost-savings.
Now, notice the “would be willing.” That wording suggests this trend is hypothetical. The other evidence, though, does not.
As noted in this previous column, Midsized firms actually are siphoning business away from Large Law firms already. So, if the trend of Midsized firms honing in on Large Law firms is already here, then this survey seems to indicate that it will continue.
There are myriad reasons for this shift in demand for legal services, but one of them is that “pedigree” no longer seems to be the selling point it once was.
So, why isn’t it? Here are three feasible reasons.
- It’s too familiar: Legal startups like Axiom and UpCounsel, Inc. – the proverbial pretty young things of the legal industry – are presenting clients with an alluring prospect: solid legal services for a mere portion of the cost. Large Law firms do not seem to be altering their message or marketing in response. When put up against the fresh and appealing image and message of “managed legal services” companies, pedigree just isn’t keeping pace.
- The landscape has changed: This should be no surprise – many clients just do not want to pay Large Law firm prices anymore, so a “we’re worth it, because we’re the best” message is not hitting home. It seems a lot of clients are interested more in “good enough” than they are “the best,” especially when “good enough” is less expensive. In many cases, continuing to trumpet quality, when that quality may be above and beyond what is called for, simply falls on deaf ears.
- It’s out of step: This may be more of a reach, but it is not out of the realm of possibility that socially, we have tired of many solid institutions. We do not like big banks, large HMOs, gargantuan mortgage providers because in the past few years, they have all run afoul of society. To some degree, this has engendered a mistrust of large and well-established entities (like pedigreed law firms) and has further underscored the very American preference for the scrappy underdog (i.e. the bright and innovative legal services company).
As mentioned earlier, there are many reasons why Large Law firms might be falling out of step with their clients. It would be interesting to see whether Large Law changing its collective message would do anything to halt or even reverse this trend.