One managing partners told the researchers at Eaton Capital Partners: 'The next five years will change the face of the legal market quite dramatically and firms that do not embrace change will be left behind.' The Australian market appears highly focused on Sydney - with 79 per cent of respondents seeing it as having the potential for the most growth for the national networks of law firms. And the best performing sectors are expected to be corporate/commercial, dispute resolution, construction and infrastructure, property and M&A. A trend in the creation of boutique practices - many of which offer innovative pricing arrangements - is seen as putting pressure on the larger firms.

Underpricing

The way that general counsel have changed their approach is also having a significant effect on the legal sector. Increasingly sophisticated clients and general counsels seeking a greater risk and reward trade-off with external legal providers has put increasing pressure on the billable hour.“There should be an intelligent conversation between a law firm provider and client, with emphasis on what best suits the client,” said PwC Legal Asia-Pacific head Tony O’Malley when talking to ECP. One respondent said: 'Firms are still working out how to cope with the exponential growth of in-house counsel, client cost-cutting and the resulting stupid underpricing by competitors.' Source: Eaton Capital Partners