Last week I gave a presentation to the Houston Chapter of the AMA (on a side note – legal marketers would be wise to reach outside the LMA). After the presentation a couple of marketers from the oil industry were sharing recession stories and asked how law firms were doing. The presumption was that work is down at BigLaw just as it is every where. However, as I was explaining the situation at BigLaw it occurred to me we’re in a one-two punch situation. Yes – the downturn has slowed down the amount of work. But I think a bigger impact is coming from the shift in client attitude. We’re seeing a strong shift to a buyers’ market. And that shift is magnified for a few reasons. First, in-house clients haven’t experienced power like this before. In the old days (a year ago) they would be afraid a BigLaw firm might not represent them if they pushed on price. This is no longer the case. Clients are reveling in this new found power, and in many cases taking it to the extreme. Low-ball pricing is becoming an everyday occurrence. Second – standing behind the client flexing this muscle is the Purchasing Department. They have entered the legal pricing game in full-force. And these people are paid to flex their cost-cutting muscles on a daily basis. So maybe what we really have is a one-two-two punch to the gut. The bottom-line is that on top of dealing with the recession, BigLaw is in its first heavy buyers’ market situation. And this situation looks to be one that will endure for some time. Now – you might think if you’re not in BigLaw you’re not impacted by all this. Think again. When pressures push prices down at the top of the market, those pressures filter down through-out the market. If Mercedes starts selling their cars for $30k, Ford will be forced to move its prices down too. As I laid this theory out in a ‘thinking out loud’ conversation with my oil industry friends, the impact of the one-two punch really came home. I saw it in the eye of my colleagues. I was getting that “STBY” look from them.
