Marcie Borgal Shunk

Smart Strategy

• A Cautionary Tale

The year is 2002. Corporate clients are not happy. A new market research report shows dismal levels of client satisfaction with law firms. Key findings highlight law firms' lack of responsiveness, failure to keep up with clients' changing needs and poor value. The rising adoption of e-billing gives clients greater access to data and quickly they, led by insurance companies, begin to wield newfound knowledge to usurp power from law firms. Clients start calling the shots.

This shift in power dynamics, compounded by a financial crisis in 2009, lays bare those firms unprepared or unwilling to adapt. Dissolutions and mergers run rampant. Law firms slow to make the transition find themselves underwater, struggling to maintain client relationships and unable to keep the ship afloat. The giant wave, propelled by clients shifting work to firms they deem more responsive to their needs and more attuned to delivering value, capsizes firm after firm.

Fast forward 20 years. An entire cottage industry has blossomed around elevating and expanding client relationships. Client feedback programs, client service standards, industry teams and key client programs are increasingly common. Business development skills and training are essential to the budding lawyer and considered, at long last, critical to the promotion and long-term success of equity partners. Client service is both a differentiator and competitive advantage. And … a new entrant to the power game promises to shift the dynamics yet again.

• Talent Reigns Supreme

The Georgetown/Thomson Reuters Institute's 2022 State of the Legal Market, reports nearly one in four associates left their firms in 2021, a notable uptick from 18.9% in 2019. Lateral moves are up too—a whopping 111% increase across all levels according NALP. The war for talent is in full force and many law firms are responding in the best way they know how—to throw money at the problem. If we learned nothing from the last major shift in the industry's power dynamics, it was that money isn't enough in the long-run. Slashing rates to deliver greater value to clients is a short-lived approach that puts survival at risk. So too is hiking compensation without investing in more lasting change.