In 1964, U.S. Supreme Court Justice Potter Stewart said he couldn’t define pornography but “knew what it was when he saw it.” Something similar can be said today about the concept of value in legal services.
Ask lawyers how they define the value of what they do and most will struggle with a tangible definition. Concepts like results, responsiveness or just plain “good lawyering” may come up, but few can specifically define these terms.
We believe, given the dynamic and increasingly competitive nature of the legal services industry, that lawyers must rethink the way they create, deliver and communicate value to clients if they want to maintain sustainable and profitable law businesses. We also think that if lawyers address head-on weaknesses in the way they currently practice, they will find their work to be more personally and professionally rewarding. It’s a win-win for the legal profession and users of legal services.
Law Leaders Lab in partnership with Carol McAvoy Consulting embarked on a research project to put substance behind the definition of value through a series of interviews with General Counsel and chief financial officers whose responsibilities included hiring of outside counsel. We chose this audience because significant research exists about hiring decisions inside large organizations, but the views of this group of buyers are less defined.
Our research focused on mid-sized companies with an annual legal spend ranging from $250,000 to $2 million. These organizations are large enough to have ongoing legal needs but small enough that they outsource a large percentage of their legal services.
These closely-held, family-owned or regionally-operated companies often are the best clients of law firms of all sizes. They represent 99% of all business enterprises, collectively have tens of millions of employees, and many are global enterprises.
In the post-recession era, these organizations have more buying power than ever and are becoming more sophisticated in the way they evaluate their lawyers and consider alternatives to addressing their legal needs.
Among the findings:
- While relationships remain important, how relationships are developed and maintained is changing.
- Buyers are focused on defined business outcomes – They appreciate the time and effort lawyers put in to solving legal problems, but don’t equate time with value.
- A direct correlation exists between the business impact a legal issue has on an organization and the perceived value of the legal services provided.
- The competitive landscape for attorneys is changing as decision-makers working in this market look across all law firm tiers for the right attorney to fit their specific needs.
- With the line between business and law increasingly blurred, these same decision-makers realize they have options beyond lawyers alone when it comes to finding cost effective ways to address their needs.
Although we are not at the point of offering statistically meaningful data, through this research we hope to further the dialogue around the topic of value creation.
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To access our complete research findings and download our whitepaper, click here.
 Sylvia Hodges, Winning Legal Business From Medium Sized Companies, (Ark Group, 2011).