The Downfall of Traditional Law Firms: The Struggle in Finding Good Legal Advice

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New research conducted by global elite network Interlaw, reveals the challenges GCs face in finding consistently high quality legal advice in all of the jurisdictions in which they operate. A detailed analysis of the global footprint of major international firms revealed a significant bias towards Europe and the USA, with gaps in other key trading areas around the world.

The research, which surveyed more than 100 general counsels and senior lawyers at 55 independent law firms across 41 countries, revealed what today’s global client is seeking from its legal provider.  The findings also showed that the traditional law firm model is being challenged by alternative providers, with GCs having the freedom to choose the best legal provider structure for their needs

In this article, Michael Siebold, Chair of Interlaw, will shed light on the way ‘New Law’ models are challenging the ‘Big Law’ approach to give GCs this much needed depth and breadth they are seeking in legal provider.

 

As corporate tentacles sprawl across new and emerging geographical markets, legal services providers must be capable of offering their global clients consistently high-quality advice and service anywhere in the world – even in the most remote jurisdictions. However, Interlaw’s most recent independent research paper – ‘Global Legal Services in a Disruptive World’ – reveals the challenges general counsel face in securing this all-important uniformity in all corners of the globe.

The research, which surveyed more than 100 general counsel (GC), and senior lawyers at 55 independent law firms across 41 countries, revealed what today’s global client is seeking from its legal provider.  The short answer to this question is quality, with feedback from GCs showing they are increasingly becoming less reliant on the international law firm model and more open to the idea of working with alternative providers.

One of the reasons behind this may be found by taking a closer look at the true geographical reach of some of the world’s leading ‘international’ law firms.  The research reveals a significant bias towards the West – with 83% of lawyers at the top 30 firms based in Europe or North America – and clear gaps in key trading areas around the world.  This calls into question the capability of such firms to deliver the consistently high standards their global clients demand.

More detailed feedback from clients about their experiences of working with international law firms revealed further concerns, with almost a quarter of GCs admitting that consistency in quality and service was the biggest challenge, while one in five reported problems with inconsistent working practices between offices, as well as patchy local insight and understanding of cultural nuances. Indeed, half of in-house lawyers (50%) said that as global law firms continue to grow they become bogged down by internal operating pressures at the expense of client service. The same proportion also said they had witnessed inter-firm political wrangling, citing poor communication between teams, blocking relationships to preserve income for a particular office and a lack of joined up working among the worst behaviours. Rather than a spirit of collaboration, the research uncovered a prevailing protectionist culture at some international firms with a distinct lack of co-operation between offices. This is entirely at odds with the type of seamless global legal services that today’s multinational client is seeking and giving rise to alternative ways of delivering legal services.

As we’ve seen, the corporate flag planting favoured by the traditional international law firm model is vulnerable to the destructive impact of political infighting. Instead, clients want flexible and agile legal providers who are willing to collaborate across borders – this is more in keeping with the network model, which is centred around collaboration and building trust. It is this emphasis on joint effort and camaraderie – where people strive to perform at their best because they do not want to let their network colleagues down – that not only sets some law firm alliances apart from others, it also sets apart the network model from traditional international law firms.

I have long held the view that the network model is more attuned to the needs of the multinational, 24/7 client. The past two years in particular have seen the waters getting increasingly muddied in terms of large firms adopting the network model, and it’s a trend that will only continue to grow. International law firms are becoming more like networks and networks have adopted some of the best traits of international law firms, but with one distinct advantage. Networks offer better value for money, as they do not have the expense of supporting the vast infrastructure that international law firms have to maintain, a fact stemming from the independence of our firms.

Almost half (46%) of the GCs involved in the Interlaw research said they already use or intend to use a network of independent firms. Of those who had already worked with a global network, 77% described their experience as good or excellent, with local insight and understanding of local culture cited as the most important benefit. They described networks as “convenient”, “dependable”, “efficient” and “effective”, but there is still work to be done to convince some in-house lawyers who used words such as “complicated” and “confusing” to describe the model. They also didn’t score as highly as international firms on their ability to use consistent working practices, such as billing and project management.

Through this report, it was important for us to get an honest picture of the type of service global clients currently receive and how we need to adapt to their future needs. Our mission at Interlaw is clear – we want to create a leading global legal services platform that can truly meet and evolve with the needs of the 21st Century multinational client, providing seamless access to consistently high quality legal solutions in every jurisdiction in which they operate.

This means ongoing investment and collaboration, but we have a clear plan and are already delivering against it. We conducted a detailed strategic review, which has resulted in our new Interlaw 3.0 strategy – a three-year plan, with clearly defined projects and timescales, to create a legal network that embraces innovation, technology and sophisticated marketing and business development processes. Not only will this bring benefits for our member firms to grow and develop their businesses, it will ensure we keep pace with the evolving needs of our global clients.

 

About Interlaw Ltd.

For over 35 years, Interlaw has been one of the world’s leading global networks of elite independent law firms for both global clients and member firms. Chambers and Partners ranks Interlaw as a global elite legal network. With 7,000 lawyers worldwide in 140 cities and growing, Interlaw has the capacity and ability to mobilise lawyers for the benefit of global clients and member firms, wherever in the world they want to do business. The network is fluent in the nuances of international business, yet offers an unrivalled presence across the world.

Unlike a global law firm, each Interlaw member is an established independent law firm in its country, with only the best law firms accepted as members to ensure quality is never compromised. The connected capability offered by Interlaw means lawyers can respond to the demands of global business no matter what the time zone.

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