We live in a society that expects information at our fingertips, 24/7. No one wants to wait. For example, social media provides updates on current events faster than traditional news organizations. Email and texting allow for instant communications back and forth. Why would these principles not apply to delivering legal services?
On cost structures, the Great Recession has opened the flood gates for the expectation of “more for less.” This applies to products and services across the board. Clients also expect their lawyers to create efficiencies that can lower costs of legal services. The lawyers who do not figure this out will be left behind.
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When discussing cost efficiencies, this necessarily raises the issue of how legal services are billed to clients. Not too many people (both lawyers and clients) enjoy the billable hour. This has given rise to alternative fee structures. Many law firm business models are based on an hourly billing structure—a certain number of hours must be billed and collected each year to satisfy overhead and profits for partners. This creates a significant challenge when clients no longer will pay existing billing rates and law firms will have to cut more expenses.
As more and more clients expect alternative billing structures, a bigger picture issue creeps in: How do you sustain a business model that is built on hourly billing when you can no longer bill by the hour? Overhead can be sliced off, talent can be let go, but as the “more for less” mantra continues, eventually the existing structure will fall apart.