Like many industries worldwide, the legal world finds itself in an era of transformation. After decades of rapid growth, the demand for traditional legal services has slowed enormously since 2008. A number of factors drive this sea change — two of the most important are the influence of technology and globalization.
The influence of technology on the law
The practical impact of modern-day communication technologies is that a law firm no longer needs to be physically located in a city next to the courthouse and near the client. Firms can now exist virtually anywhere and provide the same advice and services.
Law libraries once stacked with books are now relics — most reported cases, laws, statutes and regulations are easily accessible by anyone online. Lawyers can no longer claim to have exclusive access to the “secret archives” of the law.
Technology makes it increasingly possible to displace lawyers who handle routine legal matters. Computerized programs or low-paid workers located 10,000 miles away can often perform the same tasks at a lower price.
The tidal wave of globalization
A second factor affecting the legal marketplace is globalization. Growing numbers of businesses are no longer local and thus require legal advice from wider geographic areas. It is increasingly difficult for the single-office law firm to effectively respond in a cost-efficient manner.
Increasing numbers of companies conduct business both nationally and globally, which drives demand for quality legal advice from a broad range of jurisdictions instead of just within a single market.
What these developments mean for you
The swift, radical transformation of the legal market promises to permanently alter how companies work with law firms and lawyers—businesses are now in greater control over their choice of legal providers and over the cost of legal advice and guidance. These factors present those seeking legal advice with many more options and price points.
Options for legal advice in a global marketplace
While large international law firms have the advantage of excellent resources, reputation, status and credibility, they rarely cover all key global markets and legal costs are uniformly high. Additionally, their service can be weakened by a “long chain of advice,” meaning that while the firm’s core may be strong, its expertise in all jurisdictions may not be uniform.
An independent national firm can offer excellent jurisdictional and legal expertise for their area; a national culture closely akin to major national corporate clients; a short, personalized service chain; and an established understanding of and familiarity with national judicial and regulatory practice. That said, this type of firm will need some very good friends or a reliable international network to cover their needs in cross-border business and foreign jurisdictions.
Boutique law firms offer high competence in narrow, specialized areas, but do not provide general commercial or litigation expertise that is often needed by domestic and global businesses. This characteristic often requires businesses to hire a second firm.
When a business operates exclusively within a specific area, regional law firms can be a good alternative; however, their costs tend to be higher than local firms, and, should a business need it, regional firms offer no coverage outside of their confined areas.
Legal networks and alliances
Faced with profound change in an increasingly global marketplace, many law firms have joined legal networks and alliances. These relationships provide firms with local knowledge and insight by experienced local practitioners, a larger coverage area, and lower fees when compared with the rates charged by Wall Street firms and larger international firms. These networks can often be more flexible in their approaches, and there is less chance of a conflict of interest.
One potential disadvantage of legal networks is a lack of assurance that the quality of legal counsel is consistent and of high value. This means that a network must continuously monitor and evaluate its member lawyers and law firms.
Meritas (www.meritas.org) is an example of a highly efficient and competent global legal network. It has received an elite rating from Chambers (a lawyer and law firm rating service) and is recognized for its quality assurance program, which requires that each Meritas member firm be recertified every three years — or be replaced. With 176 member firms in 76 countries, 7,000 member lawyers and 220 law offices located throughout the world, Meritas member firms provide a broad scope of legal services for businesses worldwide.
While there are a number of options available to businesses requiring legal advice, one of the most cost-effective global options is to work with an independent law firm that is a member of a high-quality legal network with a broad geographic reach.