Cost Cutting and Shifting Paradigms

We all know the economy is in the doldrums, but I thought it would be helpful to drill down a little bit to focus more on the legal sector and how it really impacts all of us -- and show why our company is positioned at the fulcrum of the coming change.

Here in Atlanta, we began to see a change beginning in May 2008. It began slowly with a change in complexion of some large projects, mainly with some of our law firm clients who were seeing less transactional work; some of the work our attorneys would normally handle was being handled by their associates. That was soon followed by an increased interest from several large, corporate clients to discuss ways COC could help them to bring their legal costs down. This reached a fever pitch in the late fall as the pressures of budgeting season came to bear. So, much has been made in the last six months – specifically over law firms merging, collapsing, or falling on hard times -- in reality the process truly began filtering down at least a year ago.

We have also seen these budgeting pressures reflected in the number of articles appearing in legal publications that discuss money saving alternatives. One of the most popular is coverage of the use of LPOs (legal process outsourcing) in India. There are pros and cons, and the coverage has been pretty balanced. There have also been articles discussing the wave of smaller firms that are holding rates at 2008 levels or, in some instances, cutting them. And finally, there is no shortage of articles that talk specifically about what law firms are doing to address the current economic climate both internally and for their clients.

It is safe to say that the emphasis on cost containment/reduction will continue for some time, and I think we have reached the tipping point our industry has been waiting for. It's hard to see it now, but this is going to be very good for our profession; I have been incredibly impressed with how many of our law firm clients are truly trying to make changes to meet the needs of their clients, especially concerning costs. As law firms jump on board -- and more opportunities emerge to work collaboratively -- the work product will be better and the client will be happier.

Unfortunately, many of these changes will come too late. The pressures being placed on legal departments by CEOs, CFOs and shareholders -- and sadly in some cases the bankruptcy court -- will be too much, too fast, to accept a change in direction. But ultimately, a multitude of changes will occur in the next several years over how legal services are delivered. We all must accept that these changes are coming and do everything we can to make sure the changes that are implemented by our clients are well-considered and strategic.
 

Trackbacks (0) Links to blogs that reference this article Trackback URL: http://www.lawdable.com/admin/trackback/102612
Comments (0) Read through and enter the discussion with the form at the end