find the latest legal job
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
Insurance Lawyer (1 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Great Career Opportunity ·
View details
Insurance and Health Lawyer (1-4 PAE)
Category: Insurance and Superannuation Law | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· New position to support Growth ·
View details
With friends like these

With friends like these

Internal rivalries are pushing large law firm partners out the door to smaller and more profitable paramours, concede a number of large law firm finance and technology heads.

Last month Lawyers Weekly attended a roundtable discussion that included over a dozen hand-picked chief information officers (CIOs) and chief financial officers (CFOs) from a selection of the largest and most powerful firms in Australia.

The discussion focused on the dislocation of the current domestic legal market, and the rise of non-lawyers within law firms.

The various CIOs and CFOs around the table at Sydney’s Four Seasons Hotel said that the large law firm model is under siege from clients, technology and new entrants.

“I keep telling my partners that there is 30 years of structural change happening in five years and we are two years into it,” said one senior legal figure at a national law firm with international offices.

Another senior manager at the discussion said that internal tensions are often the root cause for partners seeking a move elsewhere, and that partners are willing to move to smaller firms  to earn a fatter pay cheque.

“It all gets down to how much a partner takes home at the end of the day, that is where the  most competition is coming from at the moment at the firm level and that is why we are seeing a lot of partner movement,” he said. “Partners are savvy enough to realise that the big firms don’t necessarily produce the highest profit.”

In discussing why small and boutique firms are making inroads in the present climate, another attendee said that small firms can make strategic decisions in a clear and concise manner with a minimum of fuss.

“Small firms are more nimble, able to adapt their prices better and reduce cost far more competitively than large firms,” said this key figure within a large firm.

The discussion was organised by the legal software company Aderant.

Lawyers Weekly was invited to attend on the proviso no direct quotes were attributed or the names of attendees disclosed.

Lawyers Weekly can reveal that firms represented at the roundtable included Allens, Henry Davis York, Carroll & O’Dea, Norton Rose Fulbright, Hunt & Hunt, Moray & Agnew and DibbsBarker.

Mike Barry, the Atlanta-based senior vice president of research and development at Aderant moderated the discussion.

 

Information is power…and clients call the shots

The increasing power and influence of general counsels was readily acknowledged by attendees.

Many of the law firms at the discussion said that clients can demand information in fine detail, and that information can be used by clients to leverage external law firm relationships.

“Our clients are getting a lot smarter, they are asking for data exchange on a daily basis,” said one attendee, who added that such data is crunched and sent to one particular client every morning on an automated basis.

“So you can imagine when you have a big client with relationships with a fair few firms and they are measuring everything you do over every practice area.
“In another six to 12 to 24 months they will have a very good perspective of who the major players are and who [law firms] is performing well.”

Technology was noted as the key factor that was facilitating clients  being able to measure law firm performance, with a number of attendees noting that technology had moved from being considered internally as  an “enabler”, helping to get the job done, to being a “disruptor”, causing angst and posing questions about efficiencies and security risks.

“We are being challenged by commoditisation, challenged by expanding general counsel [influence] and challenged by the fact that you can do business anywhere,” said an attendee.

“You can move work to a cheap offshore location and make a profit that way … technology is facilitating lots of these developments and changes to the law firm model.”

 

Trust me, I’m a lawyer

Despite a general consensus that lawyers need to listen to clients and non-legal professionals within firms more, there was a general feeling that lawyers are still in the best position to determine pricing policies.

“I prefer to see the partner on the transaction rather than someone from business development, because they just want to sell,” said one attendee. “They are less inclined to worry about the profitability of the partner, they just want the transaction [to go ahead].”

It was noted that the most effective assistance business development staff could provide fee earners was around “what was in scope and out of scope” in terms of what would be included on the invoice.

 “You do see more transparency requests.

“Clients say that ‘if you are going to charge me $200K for something, that is what you are going to charge me’.

“If we then say at the end of a transaction ‘it is going to cost $225k because two or three things happened, they [the client] will say ‘that is your problem’.”

A number of attendees shared stories about clients increasingly taking an inordinate amount of time to pay bills, with one spokesperson stating that one client used such a lengthy lag time as the basis on which to look for a further discount when pressed for payment by the law firm provider.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

With friends like these
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Please, Continue (Hamlet), Melbourne Festival
Oct 16 2017
Hamlet suffers slings and arrows of top Victorian barristers
Victorian judges and barristers have performed the unique play Please, Continue (Hamlet) at the Melb...
Julian Assange
Oct 13 2017
When justice fails, according to Assange
WikiLeaks founder Julian Assange has dismissed the capacity of judicial systems to deal with complex...
Aussie anti-terrorism laws, detention of 10-year-olds
Oct 13 2017
Treatment of kids under Aussie anti-terrorism laws an over-reach: ABA
The Australian Bar Association has urged the government to reconsider proposed reforms to Australian...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...