Rather, partnering with Mosaic means meeting someone who understands your specific situation and has the solutions that will take the burden off you and allow you to move your legal department forward. Thuy joined Mosaic Migration in 2018 as a paralegal and liaison officer in Vietnam, where she worked closely with our Vietnamese clients on Visa`s business and investment suite. Mosaic is a trusted partner that helps forward-thinking legal departments achieve the next level of service and support to their business partners. With deep expertise in legal systems management and more, we work closely with you and your team to identify and implement proven, scalable solutions that solve today`s challenges and help prevent future problems. We listen and learn about your pain points, create a customized plan, and implement solutions at scale to meet your legal outsourcing needs. Our responsive team works hard to ensure your success at every turn, earning your trust in the process. Why do customers still hire large companies so often? Although the law firm model shows cracks in tension, it still accounts for the majority of legal expenses. What for? Perhaps the main reason is that there is still no “secure” and scalable outsourcing alternative for high-quality legal work. And while some large companies – notably Shell Oil – do much of their high-end work in-house, this is still partly the exception because few companies have (or need) such extensive legal services. Another reason is that the best law firms provide more than just legal services. They conduct business to their clients, have connections to senior management and the board, and provide “cover” for poor results (“You don`t get fired for hiring IBM” and “CYA”).
Another reason is the symbiotic relationship between some companies and in-house legal departments – a kind of alumni club. And yet another factor is the inertia associated with the high cost of replacing businesses. However, it`s only a matter of time before The Big Four or any other multidisciplinary professional services provider with a platinum brand and global reach breaks the legal vertical. Disruptions can also come from global legal networks that leverage technology, processes, local expertise, and a new delivery model that reduces legal costs, mitigates risk, and seamlessly integrates additional service providers as needed. The technology already exists; It`s only a matter of time before the first “secure” provider with sufficient size and a new customer-centric model emerges. The 2008 financial crisis and its aftermath have been an accelerator for the rise of tech-savvy and litigation-savvy legal services firms. Unlike law firms, which are prohibited by law from accepting institutional investment capital, large service companies invest heavily in technology and processes. They have a corporate DNA and mindset designed to create “better, faster, and cheaper” legal solutions that fit well with the company`s culture.
Legal service providers have quickly become a multi-billion dollar market segment. Their agile, on-demand models are attractive alternatives to the high staffing costs of law firm lawyers. The same goes for their reduced pricing structure. Conclusion It is difficult to say how long the gold mine will last for the partners or when the established business model will give way to a new one. The short-term approach taken by law firms to maintain soaring PPPs cannot last another generation. Chances are its end will come much sooner. Today`s business is based on technology that aligns customers with suppliers and eliminates “middlemen.” The traditional business model is an intermediary. You have to give something. The law firm`s response: preserve profit per partner Given competition from the firm`s services and a growing number of service providers, how is the firm responding? Most companies make changes of course, but these are internal changes aimed at obtaining PPPs. So why aren`t companies taking more aggressive steps to give the customer what they want? The simple answer: partners – especially older ones – thrive, even if their model stalls.
And as Richard Susskind says, it`s hard to convince a room full of millionaires that they`ve misunderstood their business model. We combine diverse experience with a clear understanding of the role legal departments play in our clients` success. When talking about a “law firm”, it is important to distinguish between participating partners and all others. For in today`s world, to paraphrase Caesar`s Gallic Wars, “all enterprises are divided into two parts.” Partners are extending the life of their model, even as customers increasingly reject it. Earnings per partner (PPP), the gold standard for law firms since The American Lawyer first published its profitability ranking in the mid-80s, has been both the lifeblood of companies and the demise of the hourglass. With the exception of some brands, PPP is achieved by increasing rates and billable hours, limiting partnership, retaining rainmakers and pulling large booklaterals, as well as reducing partnership hotbeds. This drives PPP, not customer value. This also explains the rate and billing increases that many companies are imposing at a time when customers regularly demand substantial discounts on “trial rates” and increasingly prefer flat rate billing. Good lawyers are problem solvers. The best ones prevent problems and, if they inherit them, they prevent metastasis. With a robust demand for legal services and a demand for law firms that has been stagnant for the past three years, law firms have a problem. Its essence is a shift of the traditional law firm model with the market – except perhaps in some high-value cases.
Will it be corrected? The increase in partner profits (PPP) indicates this. But the growing share of legal services provided outside of law firms suggests otherwise. What is it? Short answer: The partners have solved their challenge – how to increase PPPs with a decrease in demand for law firms? Companies, on the other hand, have a systemic problem that is worsening and threatening their sustainability. The list of client complaints about law firms is long and familiar – high and unpredictable costs; limited understanding of their activities; poor management of processes and projects; and ineffective communication. Technology is a particularly important factor. Used thoughtfully, IT promotes efficiency. captures intellectual capital; streamlines the process; promotes cooperation; replaces services with products and, for all these reasons and more, is anathema to law firms` performance and compensation systems. The traditional law firm model is based on business generation and turnover. This is achieved by many billable hours under the heading “rigor”. No wonder law firms have generally lagged behind in the effective use of technology? Internal size, influence, portfolios, compensation and market share are steadily increasing. Importantly, many departments now have almost as many lay members as lawyers.
Indeed, legal delivery today is a three-legged stool, supported by legal, technological and procedural know-how. Law firms are strong legally, but generally lag behind when it comes to technology and litigation capabilities. And the DNA law firm is not willing to offer technologists and experts in service delivery an equal seat at the management table. Simply put, internal services do a better job than law firms that integrate technology and processes into the delivery of legal services. This begs the question: What does this mean for the future of law firms as we know them? Where is the succession plan? And who will train the next generation of entrepreneurial talent? Where will the capital come from to invest in technology and when will companies assume their critical role in providing legal services? Law firms pursue a short-term strategy that is easily obvious to clients. Thus, since the PPP is temporarily supported by lateral acquisitions – individually or en masse – one wonders how long the current law firm model will survive. With the decline in market share of companies with no signs of reversal, most partners – especially with around 20 branded companies – have never been better rewarded. For The Am Law 100 as a whole, the average salary per partner increased by 4% in 2015, following a 5.3% increase in 2014. Wachtell boasted of a huge PPP of $6.6 million. The average PPP of AmLaw 100 was well over $1.5 million, which is not bad for a model on rocks. The law firm model can be attacked, but the partners feel no pain – at least not yet. And that`s why companies aren`t reconfiguring their model to better align with the customer.
But perhaps the biggest impact of the financial crisis is the explosive growth of in-house legal services. It is easy to dismiss the “internalization” of legal work as labor arbitration. However, the most fundamental reason for organic growth is the inability of law firms to deliver excellence and value. The lack of value is linked to the traditional business model and culture. The performance criteria and incentives for law firms are very different from those for corporate departments, where business generation is not a criterion for success – although promoting business and business goals certainly is. In-house lawyers have many “in-home advantages” over outside lawyers. Examples include: superior knowledge of the company`s objectives and risk profile; Cooperation with key commercial interests; and integration with the company`s IT platform. For these and other reasons, corporate legal services now account for about 45% of total legal expenses. Lawyers are constantly struggling to manage information and business processes, and the pressure to cut costs is increasing.