BigLaw economics likely have changed permanently. Is the same true for the consulting companies that advise large law firms?
Consider that virtual law firms and boutiques now compete effectively with large law firms for a wide range of matters. This is true because
- Cost pressures force general counsels to consider lower cost alternatives to BigLaw
- Smaller firms offer world-class capabilities through technology and informal or formal alliances (e.g., Meritas)
- GCs demand alternative fee arrangements (AFA) and smaller firms, with their much lower overhead and more flexible thinking, are more willing to offer them
- BigLaw benefits have likely been over-rated all along. Need a global footprint? Just how effective are multi-office firms in utilizing their global offices? And, if as GC argue, they hire lawyers and not firms, why does a global network or having multiple practice areas matter?
In my anecdotal observation, similar forces operate among law firm consultants. My sense is that 2 or 3 consultancies dominated legal consulting circa 1990 but that they have since lost significant relative market share. Perhaps it’s just because I’ve been around a while and know more firms, but I do think there are many more solos and small consulting firms today than even 5 years ago.
BigLaw and the consultants who serve both are in the business-to-business market. B2B marketing has shifted and continues to shift to the web and social media where scale matters much less. For example, consultants such as Rees Morrison, Bruce MacEwen (aka Adam Smith, Esq, Jordan Furlong (new to the consulting this month), Patrick McKenna, or Bruce Heintz illustrate how blogging can either establish or maintain thought leadership, a key consulting selling point.
Of course, the solos and small shops have no monopoly on using social media to build their brand. At Altman Weil, consultant Tim Corcoran blogs extensively and Pam Woldow writes an outstanding Twitter feed @pamwoldow.
With the rise of web-based marketing and low cost technology, brochures, tech infrastructure, office space, acquiring support…. all the requirements to operate a business have become easier to acquire. And branding is now a whole new game open to anyone with a PC and net connection.
I am not suggesting that BigLaw or big consulting firms will go away. Rather, the ecosystem is becoming more diverse, meaning players of all sizes can thrive and the environment keeps changing. The “new normal” is likely to be much less stable than the old one, so get ready for an interesting ride.
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