I just got back from LegalTech in NY where I saw the keynote address given by Robert Bjornsti, the GC of AXA Insurance. It was an insightful keynote, totally appropriate during this Big Bang of electronic discovery caused by the new Federal Rules. The keynote focused on the relationship between outside counsel and corporate clients. A few other bloggers have picked up on the address including one called “Corporate America Revolts Against Its Lawyers.”
The basic theme of the keynote was that corporate clients are going to increasingly build the infrastructures by which their law firms will have to abide, focusing the lawyer/client relationship back on the core value of law firms, improving service, and reducing costs for the end client.
While I might quibble with some of the specifics of his presentation, (namely the falling word powerpoint effects!) the overall point seems to be incredibly salient. Bjornsti posits a substantial impact profitability for law firms, and this will be true for marginally successful firms, I think our law firm customers who tend to be prestige brands in the space are already adapting.
There’s no secret that the business models of law firms and corporations are not aligned.
This is where we’ve built our business. We manage evidence far more efficiently and effectively than any law firm. We can hire, motivate and nurture better communications, technology and design experts than a law firm could. We’re not saddled with internal political concerns (yes, law firms are political). And finally, the value we provide is central to our business model. We are better at it, not by effort or chance, but by design. We are better just because it’s why we are.
Law firms don’t add directly to the profit of corporations but that doesn’t obviate the clear value they provide in managing business risks that can substantially alter the bottom line. When firms begin to charge clients substantial fees for activities that are not directly in their core value proposition, a great divide appears between the cost profile of the legal services and their value to the end client.
Our retentions today are not just coming from the corporate clients looking to lower costs. It’s also from our law firm customers who are thrilled to have functional experts involved, to the point where firms are encouraging their end clients to hire us directly, removing them from the budgeting and invoicing equation.
This seemingly would be taking fees out of their own pockets, right? In the end the opposite is true. Law firms don’t have to invest in more technology, which they do poorly to begin with. They get much better performance and better technology products and support. And most importantly, they can refocus their time and energy on providing outstanding legal services. The effects are clear: great clients satisfaction which creates repeat business and preserves and growing the core revenue stream — legal fees.
It’s a good model, everyone benefits, and we see the best and brightest of our customers moving in this direction in a powerful way. They want to close the divide because they are focused on providing the highest level of service possible to their clients. We’re proud to be associated with them.