How the Decrease in Demand for Legal Services Will Impact Law Firms
As time goes on, law firms are experiencing more and more of a flattening in the demand for legal services while costs continue to rise. Yet, interestingly, few firms have adapted the services they offer to try and make up for the loss. Change has failed to happen for a variety of reasons, but mostly because law firms simply don’t feel enough pressure to change. Partners are especially hesitant to adjust their behavior; their individual careers are likely more secure so they don’t see the need to rethink their strategies.
This issue has been going on for a few years, but the industry is reaching a do-or-die point. Clients are growing increasingly dissatisfied and firms are failing to implement new, cost-saving models effectively. In order to ensure success into the future, law firms need to change their models. Below are three reactions to the decrease in demand for legal services you can anticipate in the near future.
Clients will take a stand
In the past few years, rather than expressing their needs to law firms, clients have opted to just switch firms. Clients will continue to use this short-term solution, but switching law firms comes with risks; it also hasn’t proven very successful in getting law firms to change their services. Eventually, clients will need to speak up and have their needs heard. Law firms trying to anticipate the future should implement a client feedback system, if they don’t have one already.
Managed service will become more common
Expect to see managed-service providers grow in popularity. While outsourcing tasks like HR and IT will not be enough to decrease costs, using managed-service providers can lessen spending. Implementing automated systems is one of the ways law firms will likely handle the growing cost of legal services.
Businesses may rethink their in-house counsel
Some businesses responded to the rising cost of legal services by bringing attorneys in house. While that may have proved to be a good cost control strategy initially, some clients are realizing that they only swapped one problem for another. Businesses are finding themselves back at square one as in-house counsel continue to have the same costly issues, just in a different environment. Additionally, creating an in-house legal team eliminates some flexibility. Expect businesses to adjust their legal teams or reconsider creating one to begin with.