Deluded law firms may be reporting business as usual on price but many are failing to realise that their clients are bypassing them and instead of negotiating price, are pushing work down. Matters are handed to law firms that are outside the main arena and less expensive to start with, or to alternative service providers or taken in-house. According to a new report by TGO Consulting, law firms have still not come to terms with the fact that their services are a commodity and - from the client’s perspective - several law firms and multiple lawyers can perform the same task equally well. The consequence is ultimately a downward pressure on price. The ability to choose from a wide array of law firms without sacrificing quality gives clients the upper hand, the report says.
Furthermore, clients tend to avoid telling their lawyers that they are too expensive, so the law firms are left to believe everything is still OK. Failing to recognise the impact of commoditisation makes that law firms fail to adapt their business model to a lower price point when there is still time to do so. It is likely that law firms will only find out when it’s too late. The rpeort says that commoditisation is silently but rapidly undermining the law firms’ traditional business model which is still tailored towards bespoke work. The report says that failing to recognise the impact of commoditisation means law firms fail to adapt their business model to a lower price point when there is still time to do so. It is likely that law firms will only find out when it is too late, the report concludes.