The global financial crisis has forced law firms to re-evaluate their work practices and provided a catalyst for change in the legal sector, according to participants in a round-table discussion hosted by LexisNexis recently.
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The global financial crisis has forced law firms to re-evaluate their work practices and provide a catalyst for change in the legal sector, according to participants in a round-table discussion hosted by LexisNexis recently.The discussion, which included legal practitioners and managers from leading Australian law firms, examined the potential of the global financial crisis to wreak change on the legal services industry.It was determined the economic downturn has provided an opportunity to return client/ lawyer relationships to a more traditional, personal level, rather than the cost-centric approach that had become prevalent in recent years.“Over the next five years we will see a return to a more traditional relationship between clients and lawyers,” chief executive partner of Allens Arthur Robinson, Michael Rose, said.“Clients will accept that the value is in the relationship itself.”Steve Sampson, a partner at Hunt and Hunt, said the billable hour has driven mistrust into what had been strong relationships. “Clients saw that law firms were focusing mostly on productivity, profit and partner earnings.”However, Rose said partners were starting to question why their businesses had not been protected when the economy took a turn for the worse. “They are starting to realise that they need legal advisors who they know well.”The roundtable participants found a strong argument for moving away from the billable hour. Managing partner of Carroll & O’Dea, Howard Harrison, said the most likely scenario will be two systems operating in tandem.“One will be the value-adding, high level work where you can charge what the client should pay in accordance with the value they derive from the transaction,” he said.“At the other end there is a huge move to fixed price certainty. I don’t see any problem in accepting fixed price in relation to a lot of transactional legal work.”The free availability of legal documentation on the internet and fierce competition among law firms has also led to less value being placed on the services provided by legal professionals.“The black letter of the law is no longer valued,” managing partner of Swaab Attorneys, Fred Swaab, said. “These days legal information is readily available but processing this information and adding value is what lawyers get paid for. Lawyers need to stop and think about the precise situation that their client is in and the precise advice they are being asked for.”