Traditional firms need to adapt in order to keep up with the evolution on non-legal firms, according to the former managing partner of one of Australia’s largest law firms.
Tony O’Malley, Australia and Asia Pacific legal services leader at PwC, said that although the offerings of non-legal firms are different to a traditional law firm, cost or otherwise, clients are exploring their options. He said that while law firms are performing well, he said the challenge for traditional law firms will be adapting to a changing market.
“They are prepared to try new offerings and for those suppliers who are prepared to innovate and prepared to create those new offerings, whether it’s the big four, the new law firms, the opportunities are there,” he said.
“The challenge for them will be their ability in a quickly changing market to hold that talent, to co
ntinue to develop talent and to innovate at a pace that’s relevant to the market, and whether the nature of their structures allows them to move quickly enough because what’s made them successful may not necessarily be the things that make them successful in the future.”
He said that while law firms have a long history of capturing and servicing complex projects, non-legal services differentiate themselves with a variety of services and the collaborative work they are able to offer their clients.
“I think that clients are trying new things because the traditional bond between clients and law firms is not as strong as it was and that’s partly because of the pressures on the clients, the clients want more for less, they want a more efficient service and they want business advisors, not just business technicians,” he said. “The fact that you’ve got different professionals with different skills and different perspectives collaborating to create better outcomes for the client, that’s only something that can occur in an interdisciplinary environment,” he said.
A recent survey by InfoTrack and ChilliIQ of legal sector professionals found that two thirds of respondents are concerned by the offering of legal services, or the development of legal departments in non-legal firms. Roni Millard, general manager of marketing at InfoTrack said that that the lower cost of legal services by non-legal firms is an important factor for clients.
“We know that in challenging times, businesses look to grow their revenue streams and certain non-legal sectors are developing offerings in that space where it aligns to their business,” she said.
In her view, firms need to “Make sure their client relationship management practices are best of breed and their client relationships strong, play to their strengths and specialities and make full use of technology to enhance their efficiency and competitiveness so clients won’t feel the need to look elsewhere or be tempted by non-legal firms”.
According to O’Malley, competition from non-legal service providers is good for the changing legal market.
“The legal market is I think by any measure in a complete state of flux. In terms of large domestic firms merging or choosing to be independent so they are all strategically responding to changes in a different way, with new entrants from overseas, with new law firm models,” he said.