Last week I had the fortune of attending two valuable conferences – the Ark-Group KM and the COLPM Futures Conferences. Perhaps the greatest value to me was the back-to-back participation I enjoyed. This merging of ideas and forums lead me to a new epiphany – or more accurately, an expanded epiphany.
At the Ark-Group KM conference, I was co-presenting with my good friend Kingsley Martin. In our presentation he made this point: Law firms focus on high-end documents for analysis. Clients focus on high-volume documents. His point was that clients were finding value not in gaining efficiencies in Bet-the-Farm work, but instead in bread-and-butter (a.k.a. Law Factory) efforts.
At the COLPM conference there were two things I observed, that combined, make that same point from a different perspective. One was comments from a general counsel (GC) about how BigLaw is not listening. The other was a discussion on how big is the middle segment of the legal market. The GC is bringing the bread-and-butter work in-house (by adding staff) since his outside firms were not addressing that need. The discussion on how big is the middle segment was curious, since people seemed uneasy about actually naming the size of the elephant in that room.
Here comes my epiphany …
The overall size of the market is not growing, or growing very modestly. One stat on this came from another Ark-Group KM presentation. But here is the interesting part – when it comes to the shape of the market, clients have recognized that significant amounts of their work are actually bread-and-butter, in the middle matters. This means the middle of the market is likely growing at the expense of shrinking in the bet-the-farm segment. Or in other words – the overall size of the market is stable, but the shape of it is shifting.
When Ron Friedmann and I posted our Bet-the-Farm versus Law Factory posts a while back, I made the Law Factory argument on the logic that there are too many firms chasing the Bet-the-Farm market segment, making it overly competitive and expensive to chase. This new layer of thinking extends my Law Factory point-of-view, since it argues that bet-the-farm work is shrinking while law factory work is expanding.
For me, this new epiphany further bolsters the Law Factory argument. I understand my thinking is more intuitive than data driven at this point. However, the market continues to highlight clients’ pain which appears to be much more focused on the Factory than on the Farm.
Thoughts on my epiphany?
  • Even the work that is "Bet-the-Farm" is changing because law firms still think of this work as the equivalent of GC's not questioning the hourly rate or the number of hours poured into this level of work. In other words, law firms equate Bet-the-Farm work with "blank-check" work. Since no GC has a blank check to offer any longer, they are having to better manage these pieces of work and this generally means that the amount of money spent is shrinking. I don't think that the law firms have caught up to this change in process yet… but they will have to shortly.

  • "law firms equate Bet-the-Farm work with 'blank-check' work."

    This is an excellent and important point, Greg. Lawyers seem to be yearning for those happy days when they could just do the work, charge what they wanted, and get paid, without having all vexing these discussions about "value." If those days ever existed, they're gone, at least for the vast majority of lawyers and firms. Every legal task now has both a "legal work" component and a "client value" component — they're inseparable. Lawyers are only good at the first; they have a long way to go (and a short time to do it) to get good at the second.

  • Anonymous

    On an intellectual level, I think most law firm partners would agree with everything you say. They know that it is bread-and-butter work that keeps the lights on while they’re out chasing The Big One. However…

    When attorneys get tired of Big Law Life (or lack thereof), when they want A Life consisting of more than just Work, they go in-house or to an association where they can live among other like-minded lawyers.

    Asking Big Law to embrace bread/butter projects, to make these project their “main meal” as it were, is asking them to bring an element of in-house law culture into the Firm, and Big Law just isn’t designed for that. There is no place for these Others – these widget makers. It would add another layer to the firm hierarchy, and they just don’t know what that would look like.

    How would they be compensated? How would they be managed? Evaluated on a widget-per-year basis instead of billable hours? Without attractions like stock options and promotions, how to keep them from jumping-ship and going in-house? Why would they agree to be treated as second class at Big Law when in-house they’re top of the heap?

    Until Firms get this figured out, and some are working on it, nothing is going to change.