Leader
Contributors
Can anything truly threaten the premier league of global law firms? Certainly the going has been more challenging since the banking crisis for all sections of the legal industry, whether you are betting on ‘flight-to-quality’ or ‘more-for-less’, but overall the world’s top 100 commercial law firms look no nearer to an existential threat. AI? The accountants? New Law providers? The former reflects a genuine force set to substantially change the industry, though it is not apparent whether that will come at the expense of high-end law firms. The latter two players have yet to come near to living up to the fanfare made for them.
The irony is that if there is a current threat to high-end law firms it comes from those paying the bills, the clients. The sustained development of in-house teams means major bluechips already have legal operations that resemble global law firms in their breadth and resource. Part of that transformation is fired by the global arms race in private practice, which sees law firms fight to increase profitability to retain partners and hike salaries for associates. This, of course, allows in-house teams to keep justifying recruitment of expensive lawyers as a substantial saving… while welcoming the flood of disgruntled associates (and even some partners) that want out of the war. The drain of good people from private practice to in-house has become a feedback loop and a dangerous one for law firms as it remakes the legal industry. In the UK, more than one in four commercial lawyers work in-house. On current trends it is not outlandish to imagine a 50/50 ratio in 20 years. What happens to the conventional buy/sell dynamic when the clients have as many providers in-house as externally? Why go to a law firm at all?
