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attractive merger partner. Finally, maybe he should look at law firm networks: groups of firms
who are balancing their independence with the ability to expand their referral network, and are
able to quickly scale up in cases where size matters.
Having said that, to avoid being “stuck in the middle,” John Doe could dig up some
classical strategy and follow Porter’s advice of pursuing either a cost leadership strategy or a
differentiation strategy (but not both). Cost leadership without sacrificing quality in the legal
services market for a middle-field firm could well be a tall order; after all, how many Ryan Air-
style law firms are in the top 100? He is left with no choice but to differentiate his firm’s service
offering. Although one could say that the changes to the legal market coupled with advances in
technology have forced the John Does of this world into a corner, it may actually be a blessing in
disguise. The emergence of alternative legal service providers is forcing law firms to view their
strategic position along buy (not sell) lines. Thus critical to John Doe’s decision on how to
differentiate his service offering from the rest of the field, is the answer to the question, “which
legal services are being purchased, and how?”
Client Focus
Every law firm makes a promise to clients: “We are the best thing that could ever happen
to you.”
Clients tend to smirk when they hear this; from their perspective, their relationship with
law firms is difficult, to say the least. Why is this the case? It seems that too many law firms do
not stick to a really simple rule: Know your client, and know yourself. In other words, know who
your clients are and why they chose you.
Does that seem too simple? Right, it is that simple. Knowing one’s clients means far
more than sending Christmas cards, or inviting general counsel to lunch or even dinner. It means
knowing clients inside-out, knowing why their CEO can’t sleep at night, knowing what their
appetite for risk is, why their numbers are down (or up), what is happening in their relevant
market, and exactly how they want to receive your advice. And yes, clients are becoming more
demanding. They want quality of service at an acceptable price. Like Amazon shoppers, they
want to compare prices. Traditionally, when clients had a legal problem, they searched for a
named law firm. Today, when they have a legal problem, they search online (yes, including
“Google”). Clients are far more sophisticated when it comes to legal procurement, with clear
requirements and excellent knowledge about the market. In fact, the historical asymmetry in
information and expertise between the client and the lawyer is finding its equilibrium. The
number of highly qualified lawyers moving in-house is increasing,13 and information is
becoming more readily available. Not just legal information, but information about how the
transaction is progressing, how the matter is being staffed, and how much it is costing — and all
in real time. This means that John Doe will have to find a new value proposition for his clients.14
The second bit is: What do we have to offer, and why did they choose us? Not knowing
the answer should make managing partners extremely nervous. This is the current cutting edge of
competition in the legal market. Legal technology offers John Doe the differentiation toolbox
that he needs to design his new service offering. He doesn’t have to replace his associates with
robots. Legal technology offers solutions for everything from predictive analytics to simply
13 See, e.g., The Law Society of England and Wales, Annual Statistics Report (2016).
14 See Emma Ziercke & Markus Hartung, Why the Developments to the Competence Divide (and not the Digital Divide) Will Make or Break the
Law Firm Business Model in NEW DIRECTIONS IN LEGAL SERVICES (ARK Group, 2017).
197
who are balancing their independence with the ability to expand their referral network, and are
able to quickly scale up in cases where size matters.
Having said that, to avoid being “stuck in the middle,” John Doe could dig up some
classical strategy and follow Porter’s advice of pursuing either a cost leadership strategy or a
differentiation strategy (but not both). Cost leadership without sacrificing quality in the legal
services market for a middle-field firm could well be a tall order; after all, how many Ryan Air-
style law firms are in the top 100? He is left with no choice but to differentiate his firm’s service
offering. Although one could say that the changes to the legal market coupled with advances in
technology have forced the John Does of this world into a corner, it may actually be a blessing in
disguise. The emergence of alternative legal service providers is forcing law firms to view their
strategic position along buy (not sell) lines. Thus critical to John Doe’s decision on how to
differentiate his service offering from the rest of the field, is the answer to the question, “which
legal services are being purchased, and how?”
Client Focus
Every law firm makes a promise to clients: “We are the best thing that could ever happen
to you.”
Clients tend to smirk when they hear this; from their perspective, their relationship with
law firms is difficult, to say the least. Why is this the case? It seems that too many law firms do
not stick to a really simple rule: Know your client, and know yourself. In other words, know who
your clients are and why they chose you.
Does that seem too simple? Right, it is that simple. Knowing one’s clients means far
more than sending Christmas cards, or inviting general counsel to lunch or even dinner. It means
knowing clients inside-out, knowing why their CEO can’t sleep at night, knowing what their
appetite for risk is, why their numbers are down (or up), what is happening in their relevant
market, and exactly how they want to receive your advice. And yes, clients are becoming more
demanding. They want quality of service at an acceptable price. Like Amazon shoppers, they
want to compare prices. Traditionally, when clients had a legal problem, they searched for a
named law firm. Today, when they have a legal problem, they search online (yes, including
“Google”). Clients are far more sophisticated when it comes to legal procurement, with clear
requirements and excellent knowledge about the market. In fact, the historical asymmetry in
information and expertise between the client and the lawyer is finding its equilibrium. The
number of highly qualified lawyers moving in-house is increasing,13 and information is
becoming more readily available. Not just legal information, but information about how the
transaction is progressing, how the matter is being staffed, and how much it is costing — and all
in real time. This means that John Doe will have to find a new value proposition for his clients.14
The second bit is: What do we have to offer, and why did they choose us? Not knowing
the answer should make managing partners extremely nervous. This is the current cutting edge of
competition in the legal market. Legal technology offers John Doe the differentiation toolbox
that he needs to design his new service offering. He doesn’t have to replace his associates with
robots. Legal technology offers solutions for everything from predictive analytics to simply
13 See, e.g., The Law Society of England and Wales, Annual Statistics Report (2016).
14 See Emma Ziercke & Markus Hartung, Why the Developments to the Competence Divide (and not the Digital Divide) Will Make or Break the
Law Firm Business Model in NEW DIRECTIONS IN LEGAL SERVICES (ARK Group, 2017).
197
