The Challenge and Opportunity of Legal Fee Pressures: A Roadmap to Law Firm Margin Improvement
Danny Ertel and Mark Gordon
Today’s market for legal services poses unprecedented threats to large law firms. Clients have been grumbling about legal fees for a long time, but they are now demanding better, cheaper, faster service from outside counsel. They want bigger discounts as well as greater transparency on bills, and are refusing to pay for the law firm model which leverages junior associates and openended billable hours. Corporations are deploying procurement teams (and their favorite weapons — RFPs) more frequently to wrangle costs out of the system. Firms are fiercely competing in a more crowded fishbowl not only within the traditional competitive set, but with well funded, and frequently underestimated, predators such as legal process outsourcers (LPO) and emerging technologies like e-discovery and automated document management tools.