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CCCA_V7No3_Dept-LegalMkt-FIN_CCCA_V6No4 13-09-23 2:56 PM Page 12 Legal marketplace Wanted: Legal services innovation By Joe Milstone ometimes at the amusement park, I doing more with less, Sthink of how aliens with an objec- demonstrating enhanced tive set of eyes would view rollercoast- value through providing and ers and spinning teacups as fun. In the obtaining more pragmatic, same light, stakeholders outside of the operationally-knowledge- traditional business law firm, including able counsel, and realizing on corporate counsel, should take a sober increasingly restricted budg- look at the system that continues to ets. Yet, how many Canadian hold them captive. is precisely that — corporate counsel have truly capitalized on 45 per cent of firm leaders believe their they’re “outside.” available innovation in the market as firms have made significant changes in The traditional service delivery model opposed to merely nudging the “old their service delivery approaches. is built on excessive overhead, antiquated guard” to become something it is not? The Further, when firms were asked what systems and processes, client-funded traditional model maintains strong benefits, their challenges were, client priorities like training, uncontrolled duplication, and primarily in highly specialized matters and value and improved efficiency were 8th exorbitant profit expectations fuelled by truly large-team situations. Those benefits, and 11th, respectively, on a list of 12 (the the drug of student and associate leverage however, do not generally include budget first four of which were all self-focused — (for example, in the U.S., which is a like- empathy, in-house counsel-type advice and in order, increasing revenue, new business, ly comparable market for which data is approach, nimble innovation and proce- growth and profitability). available, profits per equity partner in Am dural efficiency, which are paramount in It will take a lot more table-pounding to Law 100 firms grew from $470,000 in the predominance of matters that corpo- invoke real change in the legal industry. 1995 to over $1.4 million in 2007 during rate counsel manage. From the vantage point of newer firm part- a period of negligible inflation, according Perhaps not surprisingly, this generally ners, change will be difficult. It’s their turn to information in After the Golden Age: complicit corporate counsel mindset is at the trough. They’ve been busting them- The New Legal Era). The pricing for joined by — and perhaps has led to — a selves for years to reap the huge economic services has been determined off of this lack of real change or innovation in tradi- benefits of the old way, so now will never total number — an entirely supply and tional business law firms. For example, a seem like the right time to bring in a new profit-driven metric — rather than any recent survey of large US firms showed way, particularly where the fountains may semblance of value to the customer or any that while almost 96 per cent of respon- well not flow as heartily. As pundits have sense of the changing economic realities dents perceive price competition to be a said, it’s “hard to tell a group of millionaires outside of the firms’ myopic view. permanent shift, only 29 per cent believe that their business model is broken.” There is a curious disjoint between the that they have significantly changed their As bad as the traditional providers think perceived pain-points on one hand and, on strategic approach to pricing. Similarly, they have it now, rates are still rising — the other hand, innovative action on the while 96 per cent of respondents believe just at a slower pace than previously. In part of both corporate counsel and the tra- that a “focus on improved practice effi- what industry other than this one can sup- ditional business law firm in this country. ciency” is a permanent change and 79 per pliers assume and dictate that: (a) prices ISTOCKPHOTO.COM Survey after survey stresses the fundamen- cent expect “more competition from never go down; and (b) massive historical tal challenges to corporate counsel of non-traditional service providers,” only inflation sets a permanent price floor, with 12 CCCA Canadian Corporate Counsel Association FALL 2013