David J. Parnell interviewed me for Forbes on The Evolution of Legal Consumers. He asked me to describe the evolution of legal consumers over the past 10-15 years. Here’s what I said: “Speaking about the corporate legal consumer, this market has become a buyers’ market in that time frame. Law firms added expensive capacity to meet robust demand, and then the demand for high priced legal services tumbled in the recession. Not every segment was hit equally hard, but companies decided that “commodity” legal work needed to be done more cost effectively. The companies, en masse, decided to apply procurement principles to the acquisition of law service. It is rooted in cost pressure that comes from the client’s top management and requires the legal department to act upon it.
Many of today’s legal clients shop around and consolidate the number of firms they work with. They demand more value for their legal budget and financial accountability from the law firms they hire. Many firms experience the increased pressure, and as a consequence, clients have an easier time to get costs down and to dictate the terms. It has become more Darwinian: Successful firms have responded with automation, low cost labor to least complicated problems, and locating law talent to less costly markets. The day of the multi-million dollar legal bill with no explanation has come to an end.
Corporate clients also have become much more sophisticated buyers who better understand their needs. This is due to increasingly-available comprehensive legal information on the Internet as well as companies employing former private practice lawyers who understand how law firms work, where money can be saved, and how more value can be created. With the rising influence of procurement among large companies, many law firms have become providers of legal services rather than trusted advisors. The data explosion has made it easier to make tough and wise choices.” He also asked me a number of other questions. Read the full interview.