The Death of the Traditional Law Firm?
"The market will no longer tolerate the inefficiencies of the traditional law firm model," says Ralph Baxter, Chair of Thomson Reuters Legal Executive Institute and, among other roles, Former Chair and CEO of Orrick in "A Framework for Success: The 21st Century Law Firm Business Model."
Baxter says "Persistently and progressively, clients are insisting that legal service be provided in ways that are more tailored to their precise needs and for fees that bear a more reasonable relationship to the value provided." This insistence has led to most cost efficient legal services through:
- Demands for substantial discounts and alternative fee arrangements
- Shift of legal work from outside counsel to expanded in-house departments
- Creation of alternative legal service providers, including staffing firms, contract attorneys, and legal service professionals / staff without law degrees
Baxter examines five dimensions of the current law firm model that need could be changed in order for law firms to succeed in today's marketplace, including moving away from the billable hour. The pressure on law firms has reduced available jobs in traditional law firms, but that same pressure may be opening up alternative positions within corporate legal departments, but also within law firms up to the challenge of looking beyond short-term profits per partner to see that the legal marketplace is changing.