The ever-growing challenges for private practice

The ever-growing challenges for private practice

Ever changing challenges for private practiceWe are reading with increasing regularity reports of success stories involving GCs in large corporations making drastic reductions to external legal spend.  Significantly, we are also seeing a growing emphasis towards keeping more complex, high-value work in-house while outsourcing the volume, lower value or more mundane work.  Notable recently-reported examples are Telefonica’s 66% reduction in external legal spend over 2 years and EDF Energy’s strategy to keep the “fun stuff” in-house.

Achievements of this kind are being seen as beacons of success for in-house teams.  On any measure it is fair to describe them as client-service wins, furthering the key objective of the in-house team to increase its value and visibility to the wider business.  This scenario is also propelling resource management to the top of the list of essential skills for general counsel.

This is not good news for private practice.  The broad message seems clear and simple.  Law firms are currently losing the battle with in-house for a significant and growing share of corporate legal business.

There are plenty of things private practice can and should do to align itself with this critical market  segment to help stem the tide and they are well-versed, corporate clients having been clamouring for them for some time.  The GCs’ unmet wish list has been the topic of much writing and speaking in recent times and I will spare readers yet further repetition.

Private practice does however have a powerful trump card up its sleeve.  If there’s one thing it can offer of high value that in-house teams are inherently unable to deliver themselves it is the perspective, insight and knowledge that comes from acting for a wide variety of clients, enabling the sharing of best practice across a range of clients, within and across industry sectors (within the bounds of confidentiality duties, of course, but this needn’t restrict its practical impact).  If harnessed effectively, this can make for a powerful service proposition capable of delivering really meaningful commercial value to clients.  This approach can be developed into a horizon-scanning service to be able to offer some much-needed comfort to the many senior in-house lawyers afflicted by ongoing regulatory compliance nightmares.

Time and time again I am told by GCs that this sort of offering is at the very top of their wish list, yet the supposedly highly-competitive market does not seem readily able to deliver. It would be of significant value in reaching their broader objective of gaining maximum possible control, or at least visibility, over external environmental factors thus enabling a proactive and preventative approach, as opposed to a risky and costly reactionary one.

Of course, this raises the question for private practice as to whether facilitating this outcome would over time result in a substantial and unpalatable contraction in the size of its market.  My answer to this is: yes, exactly.

Related Articles:
Latest Articles:
About the author: