In about 10 days, I will be presenting as part of a panel at the Thomson Reuters 24th Annual Marketing Partner Forum. The session I will be presenting will be focused on differentiation in a highly competitive market. Aside from being a hugely important topic at this moment in time generally as we usher in 2017, the topic is a reaction to the 2017 State of the Legal Market Georgetown/Peer Monitor Report which is now available. The report tracks firm financial and other performance metrics in the US over the course of the last decade since the “Great Recession”. Not surprisingly, the report paints a somewhat bleak picture of the current state of legal services – from an operational point of view. I will leave you to read the report, but the Coles Notes (Cliff’s Notes) version indicates that:
- demand growth is flat;
- there is declining productivity;
- firms are experiencing growth in expenses, and
- increasing cost of leverage; despite
- ability to raise rates 2 to 3 percent a year, which is countered by;
- steadily declining realization rates.
- a buyer’s market;
- death of the billable hour pricing;
- erosion of the traditional law firm franchise;
- declining effectiveness of traditional leverage; and
- growing segmentation within the market for law firm services
It’s a bleak and scary picture, one that in my mind doesn’t even take into account the effects and affects of technology on the profession, in practice and in operation.