For Firms Across the Globe, Being Nimble is Keyaderantuser
For law firms trying to cope with the rapidly changing legal landscape, prescriptions from the experts seem to focus on one primary goal: be more “nimble”. From my perspective, a firm will be nimble if they have a mobile workforce and a deep understanding of pricing and profitability. The firm can therefore change as the future of law unfolds and won’t waste time and effort trying to guess what the future holds.
It was 2011 when the Managing Partners Forum group here in Australia noted that law firms “have just two choices – adapt to the ‘New Normal’ or perish.” By and large, I think the Asia-Pacific legal industry has received that message loud and clear. The clients I work with are adapting to current realities and are focused on increasing revenue. The ones that will be most successful going forward will combine flexibility, efficiency, and technology to rapidly respond to these new market pressures.
The sudden rise of innovative pricing paradigms is just one example where firms have had to quickly adapt to new pricing pressures from both competitors and clients. In their recent report Substance Over Status: Justifying Change, the Gensler consulting firm noted that “clients continue to distinguish high value legal work that requires the counsel of experienced attorneys from commodity work, and refuse to pay as much for work that less experienced attorneys can handle… In response, law firms are developing leaner business models—from employing contract attorneys to making fewer equity partners—to maintain profit margins.”
Here in Australia, the legal consultant Colin Ritchie echoed these sentiments at an Australian Legal Practice Management Association forum last year. He argued that “the best profitability and cash flow [comes from] hungrier, nimble, small firms, or very big disciplined, structured, large firms.”
I would argue that the size of the firm isn’t the critical issue. Instead, it’s the firm’s willingness to change and adapt to the new realities. The firm Robin Rolfe Consulting put it well in the blog post titled Firm Be Nimble, Firm Be Quick. “The notion that the practice of law is an art, not a science is old school. Savvy GCs expect firms to streamline processes, provide transparent pricing models, utilize technology platforms to drive productivity and be able to show reports and metrics that support the fees charged… Technology is no substitute for great lawyering, but lawyers who don’t harness technology to improve efficiency will be at a disadvantage.”
How nimble is your firm? Do you see this idea of “nimbleness” being a key competitive advantage?