Corporations Looking for Law Firms With Low Cost

Fellow blogger Janell Grenier of tipped us off to this article, Tech Revolution: Change or Die by Laura Owen, Director of Legal Services for Cisco Corp.  Dennis Kennedy and Ernie the Attorney recently posted about this article as well,  respectively over here and here.

Owen argues that corporations want law firms who “get” technology and the need to keep costs low.  She advocates measures such as moving work to lower cost centers in the Midwest and South,  commoditizing and using technology to perform repetitive legal work   (she cites one firm that has developed a do-it-yourself contract form that a firm attorney later reviews) and moving away from the billable hour.

These same arguments would also bode well for smaller firms which can implement these types of measures more flexibly and provide cost effective service.  Still,  I’m not as optimistic as Dennis that larger firms that don’t adapt to clients’ needs  will eventually fall by the wayside.  Even as forward thinkers like Owens or Dennis argue for lower costs, at the same time, firms continue to merger growing larger and larger.  I simply don’t believe that a ginormous firm will have the same efficiency as a smaller one if only because it relies on the power of hundreds of associates and multiple levels of review to generate revenues.   So how to reconcile the merger trend with the increased calls for flexible billing and the like?  In five years, will the legal market be dominated by ten giants (who will rewrite conflicts rules to enable them to retain more clients?)  Or will it be populated by small, lean high tech operations responsive to client needs?  Naturally, I’d love to see the pendulum swing to the latter but I am not always so sure that is where we are headed.