Deloitte's David Hawley assesses how consultants can offer more to lawyers than rising blood pressure and an overdose of PowerPoint

Fact 1: Consultants have been less prevalent in the legal sector than in almost every other area of the economy.

Fact 2: Over the past decade – including the last year – the growth of the legal sector has significantly outstripped almost every other part of the economy.

To some consultants in the legal sector, the juxtaposition of these two statements might appear a little uncomfortable. Could they possibly be related? And if so, what hope do people like me have for the future?

The use of consultants in the legal sector is driven by both supply and demand. Let's look at the demand side first. In most industries it's not uncommon for senior managers to have worked as consultants at some stage in their careers, or to have gone to business school with people who are now partners at consulting firms.

They know what consultants can offer and how to use them to the best effect. Managing partners and senior partners of law firms are different – they've usually emerged as leaders by being good lawyers and having good networks within their firms. Often, they are understandably reticent about bringing in expensive outsiders to tell them how to run their firms.

The fact that consultants are often armed with incomprehensible PowerPoint 'decks' and may appear unable to talk for more than a couple of sentences without lapsing into business jargon or acronyms doesn't help either. "What on earth can these people possibly offer me?" think the lawyers. Closely followed by another very valid question: "why would we want to spend our money on consultants when we've done so well without them?"

On the supply side, most large consulting organisations have thrived as a result of major transformation programmes – addressing issues like process redesign, change management and installing complex IT systems – in some of the world's largest public and private sector organisations.

Niche market

The fact of the matter is that, apart from the largest firms, most law firms simply haven't been big enough or complex enough to warrant much attention from many of the large consultancies. As a result, many of the consulting firms that serve the sector have been niche boutiques rather than the sorts of organisations that dominate other sectors.

However, the structure of the legal industry is changing. Large law firms are now huge organisations with complex operations around the world. The issues firms face around globalisation, competitive pressures, technology adoption, human resources, client management and cost management are at least as challenging as at other organisations. The potential regulatory upheaval that the legal sector is about to go through is in a different league to most other industries. And the level of merger activity is likely to grow as the sector continues to consolidate.

The current state of the economy is causing these structural changes to accelerate and, because the overall volume of legal work has declined – particularly in those areas that profited most from the credit boom – it is more important than ever for firms to exploit any advantages they have in order to outperform their competitors.

In such circumstances, law firms are more likely to benefit from using external advisers than in the past, and large consulting firms will increasingly view the legal sector as attractive.

Before consultants get carried away, they need to remember that they will only be hired if they can demonstrate clear value for money. This is particularly true now, when most firms are focusing on costs much more seriously than in the past. Although the range of solutions offered by consultants is very broad, there are a number of characteristics that are likely to be common to the consulting organisations that thrive in the future:

They understand the legal sector. This may sound obvious, but as the consulting opportunity grows there are likely to be increasing numbers of consultants – and consulting firms – who have never worked in the sector before or who only have a passing knowledge of the issues.

They can bring insights from other industries. Often the most useful assistance consultants can provide comes from applying knowledge of what works in one sector to another. Learning, for example, how large accounting firms structure themselves internationally or how other large business-to-business companies manage client relationships can be of enormous value to law firms.

They can translate 'what' into 'how'. It's good if your consultants have smart ideas, but these are of little use if they cannot be implemented. Consultants should be prepared to roll their sleeves up to work with their clients in achieving lasting change, rather than merely delivering elegant reports.

They invest in relationships. In this respect, successful consultants are just like successful lawyers. They take time to understand their clients and recognise the benefits of ongoing investment in the relationship, introducing other colleagues whenever appropriate.

They know when to say no. Consultants can sometimes be too ready to claim expertise they do not have and encourage changes that clients do not need. While this can be an effective approach in the short term, in the longer term it never is.

As the legal landscape evolves, so will the way consulting firms and law firms work together. If managed correctly – by both sides – it should be fruitful for all concerned, despite the challenging times ahead.

David Hawley is a director in Deloitte's strategy consulting practice and frequently advises law firms.