Biglaw Plods Towards Mastodon's Fate
When the general counsel of a major corporation says that the current model of the large law firm is heading towards extinction, ears perk up throughout the legal industry. That is precisely what happened after Sun Microsystems GC Mike Dillon wrote on his blog last week that Biglaw is going The Way of the Mastodon. His thesis is that large law firms exist primarily as aggregators of specialized legal expertise -- by combining multiple legal disciplines, firms can provide "one stop shopping" for their clients. That used to make sense, in the days before the Internet when it was inefficient for a company to hunt down all the specialized legal talent it might need. But with the Internet, the model is changed, Dillon says.
"It is getting increasingly easier to move the aggregation function in-house. To find an attorney in a specialized area, I don't need to turn to a large law firm. Instead, I send out an email to my network of other in-house attorneys or within professional associations like the ACC and get referrals. Not only that, but I get true 'customer feedback' that is more objective than what I would get from a firm. There is now a proliferation of materials available on the web – judicial opinions, legal commentary and press articles that also provide information about attorneys."
Sun, for example, now uses a boutique for its employment matters. They get excellent results and are cost effective, Dillon says, continuing:
"My point is that the epoch of the current law firm model - which derives its profitability from growing scale and raising hourly rates - will soon be over. The firms that will survive and thrive are those that recognize this change and focus on how to maintain margins by focusing on efficiency. In the future, I'll describe some the things we are doing in this area, but I'll point out that we recently selected a small number of law firms to support us as 'preferred partners' during the next fiscal year. We believe that these firms 'get it' and are receptive to looking at new ways to drive down their (and our) cost structure. Hopefully, more firms will embrace this change. If they don't, I fear they will go the way of the Mastodon."
As one might expect, Dillon's post has drawn attention. At In Search of Perfect Client Service, Patrick J. Lamb says the post is a "must read." At The Legal Marketing Blog, Tom Kane says the message Dillon conveys is that "small firms and solos have hope of seriously competing with larger law firms thanks to the Internet." In fact, says Kane, blogs play an important role:
"Along comes the 'ole' World Wide Web, and now companies can find really smart, qualified, specialized lawyers in small firms who are just as good and are much more cost effective. How do they know that they are really smart and qualified? Simple, GCs are reading their blogs."
And "Third Wave" solo Chuck Newton says that Dillon's post shows that the fat lady is ready to sing the swan song of larger firms:
"As they joke about opera, it is not over until the fat lady sings. Well, maybe the fat lady has not sung the fate of Big Law yet, but she is warming up. She is clearing her voice. She is running through the scales."
So next time you're looking for a large-firm lawyer, check the local tar pits. When you need specialized legal expertise, check the blogosphere.
Posted by Robert J. Ambrogi on May 29, 2007 at 06:16 PM | Permalink
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