Law firms are facing a wake-up call, the pot of legal spend is increasingly going to insourcing, technology and other non-law firm alternatives:
“Demand is flat or falling at large law firms, says the newest Wells Fargo survey released yesterday. Revenue is now being driven solely by hourly rate increases, the last remaining income enhancement button that law firms can press and one they will presumably continue to press until it no longer responds…as has been the case every year since 2011, the 2015 Altman Weil survey of Chief Legal Officers found that more law departments decreased their spend on outside law firms than increased it. But shrinking demand at law firms is not the same thing as shrinking demand among clients. The need for legal services — in the absence of war, famine, or some other Horseman of the Apocalypse — has never decreased year-over-year at any time, anywhere in the world….Corporate clients are actually spending more money; they’re just not spending it on law firms.”
Read: You’re not selling what we’re buying at Law21 Blog