While Legal Services Options Increase, Changing Providers Isn't Always Easy
Clients of legal services have more options today than ever before, but starting over with a new law firm or service provider still brings its fair share of problems, including the risk of placing complex, business-specific legal problems into unfamiliar hands,
March 06, 2020 at 11:00 AM
4 minute read
These days corporate clients are navigating a crowded legal marketplace chock full of law firms, alternative legal service providers, and the Big Four. Options abound—which could potentially make a customer less willing to remain in an unsatisfying relationship with a law firm or other service provider.
But are clients really willing to put their money where their mouth is and abandon the comforts of a familiar law firm or legal team? The answer may depend both on the nature of the work involved and where it ranks on the complexity scale.
"I think when you are looking at very visible transactions, very complex legal work, very custom legal work that is tailored to the business of the client, they tend to not easily bring in new law firms," said Michael Tal, co-founder and joint CEO of legal operations software provider BusyLamp.
The reasoning behind those decisions most often comes down to strategy and efficiency. Tal, for example, has seen clients struggle with the anxiety that a fresh legal team may not understand the particular nature of their business as intimately as a longstanding collaborator. New relationships also require a breaking-in period as well, where expectations or requirements around items like billing have to be articulated and reinforced.
"I think that there's definitely a cost there in connection to the ramp up to [changing firms]," Tal said.
But complicated legal matters might not be what clients have in mind when looking to their attorneys to provide more tech-enabled services. Duc Vinh Trang, a managing partner with the legal search firm of Major, Lindsey & Africa who has served as general counsel at Motorola Solutions, Inc., believes that what clients truly desire is for law firms to implement efficiency-friendly technologies around high-volume and low-complexity legal work.
The competition among law firms and other service providers to handle those types of matters can be fierce. For one thing. low-complexity, run of the mill tasks usually require little in the way of dependable legal judgment or business familiarity, so clients may be more inclined to proceed with whomever is offering the most expedient and reliable service for their dollar. Tech is certainly one way for firms to attain that edge, but not every law office is eager to put out the money, time or effort to move in that direction.
Trang indicated that he's been in the room with law firm leaders who are aware of the shifting expectations of corporate counsel—but as long as their regular stable of clients keeps coming back, they see no reason to make changes. That complacency could eventually prove costly.
"The challenge is that [clients] will come to me until they don't—and that can happen very quickly," Trang said.
As for whether a corporate client threatening to walk away from a law firm can actually effect change and deliver cheaper legal bills, the answer is likely no—or at least not as quickly as general counsel would prefer. Most law firms are burdened with a cost base that is difficult to change, whether it's real estate or the number of associates on staff. Attempting to reduce the economic burden of those variables with technology takes time.
Still, Trang believes that firms attempting to implement technology on a piecemeal or even client-by-client basis could ultimately struggle. "I think that's the wrong strategy because I think that unless you are really committed to that strategy of having technology as part of your core operation, unless you are really committed to delivering it, it's a waste of money and time," Trang said.
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