The recent Peer Monitor Index for Mid-Size Law Firms published by Thomson Reuters has quite aptly been titled “A Glass Half Full or Half Empty?” after observing the recent performances of law firms. As the report marks, since 2008, all law firms have struggled to survive within the economic recession while clients have piled on their demands for reduced costs, higher predictability and increaed efficiency. And for mid-size law firms the challenges are quite different from their bigger counterparts.
The report finds that mid-size firms constantly face the question of whether they are “big enough” to serve their chosen markets effectively. But, the report states, “This is not a question about economies of scale, but rather about whether a given firm has sufficient “bench strength” to handle the types of matters that it might realistically expect to attract from clients in the new market environment.”
This is the real question the mid-size firms need to solve as clients keep favoring a trend of choosing more specialized boutiqes or mid-sized firms over their larger counterparts. And the answer to this question will define the market positions of mid-sized firms in the current economy and the near future.
Another challenge, the Peer Monitor Index marks, that is faced by mid-sized firms is the proper adoption and implementation of technology. While technology can level the competitive field in many ways for small and mid-sized law firms, the same technologies also allow the entry of other players in the lower end of the market where legal services are being rapidly commoditized. Such services range from document discovery to document management and contract drafting – much of which used to come traditionally to small and mid-sized law firms.
The report concludes that law firms need to rethink the basic organizational, pricing, and service delivery models and cannot afford to keep clinging to models that are rapidly becoming obsolete. For those who can adjust, the glass is half full, and for those who can’t, the glass is half empty.
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