The recession has changed large law firms for the next several years and maybe forever. If you need any proof, read an ABA Journal post today: Report Finds Power Shift and Declining Support for Law Firm ‘Up or Out’ Model and the Eversheds report cited in the blog post: Law firm of the 21st century The clients’ revolution .  

As you will see, clients are in control now and  in-house lawyers are more important than ever.They have less money to spend on outside counsel and they need to get more. You will also see that law firms need to invest in technology to be able to deliver legal services more efficiently. Fees will be declining and value based alternatives to hourly billing are becoming increasingly important. Leverage will be decreased and it will be more important than ever to have high quality lawyers.
 
Clearly the report is focused on large international clients and large international law firms, but the changes will impact many other US based firms. Prior to reading the blog or report, a managing partner asked for my thoughts on changes his mid-sized firm should consider. Here are a few:
  • Firms not prepared to change and who follow the traditional model will suffer
  • There are greater opportunities and also greater risks for mid-sized firms
  • It’s time to re-think your law firm’s strategic plan. Do it soon.
  • When you are re-thinking your strategic plan, come up with innovative and creative ideas. Whenever there is a dramatic change like this, the innovators win.
  • Partners may need to be willing to reduce profits per partner while the firm invests in the future
  • Relationships with inside counsel and relationships with other client representatives are more important than ever
  • Firms must find ways to economically represent smaller clients. I wrote What Law Firms Can Learn from Amazon iTunes and Netflix. Consider re-reading it as you think about the future.
  • Younger lawyers need to become more client conscious. Just doing good work will not be enough.
  • Young partners need to be able to bring in business and clients.

The economy seems to be improving and there seem to be more deals getting done. Even so, the dramatic change described in the ABA blog and the Eversheds report requires law firms to change. What will your firm do now to be successful?