‘Revolutionary changes afoot’ in market for legal services: report
8.1.2020 | Cassandra Maas | 156
In the 2020 Report on the State of the Legal Market, the Center on Ethics and the Legal Profession at the Georgetown University Law Center and Thomson Reuters Legal Executive Institute and Peer Monitor noted that “there has been mounting evidence that revolutionary changes are afoot” in the market for legal services.
Over the past several decades, the legal industry has operated on a model that allowed senior partners in major law firms to control virtually every aspect of legal services. However, according to the report, this model is changing. Clients are gaining more power, and there is growth in the numbers and competitive threats of non-law firm legal competition.
According to the report, alternative legal service providers (ALSPs) are being increasingly used. Global annual revenues increased from an estimated $8.4 billion in 2015 to an estimated at $10.7 billion in 2017. The report estimated that 38 percent of corporations now use ALSPs for litigation as well as for investigation support; 34 percent use ALSPs for legal research services; 32 percent use ALSPs for regulatory risk as well as for compliance services; 32 percent use ALSPs for document review and for coding services; and 28 percent use ALSPs for e-discovery services. For most of these categories, this is double previous numbers. The Big Four accounting and auditing firms—Deloitte, Ernst and Young, KPMG and PricewaterhouseCoopers—have also expanded into the legal market.
In response to these changes, many firms have increasingly used specialists as important members of client-facing teams. For cost, efficiency and quality, many law firms have begun to outsource certain services and partner with other providers. Some firms have taken a “blended approach” that combines traditional legal services with other related professional expertise.
As far as the future goes, the report concludes:
We can fully expect that clients will continue to drive all service providers, including law
firms, toward multidisciplinary practice-type services designed to provide integrated solutions to business problems. That, in turn, suggests a new model in which law firms are more collaborative (with clients as well as with other service providers, including non-law firms); more open to developing multidisciplinary approaches and solutions; more aggressive in pursuing technology-based solutions; more committed to value-based pricing; more focused on outcomes; and more committed to continuous work process improvements.