A report by U.K.-based Eversheds LLP last week hammered home the need for lawyers to adapt to changes shaking up the legal sector as a result of the recession.
Based on a survey of 130 general counsel and law firm partners around the world, Eversheds noted that 78 per cent of them believe the recession will have a lasting impact on the profession, particularly in the areas of value and efficiency.
(See the Inside Story)It also indicated that the economic downturn has accelerated change in the practice of law by 10 years.
In addition, the survey tracks the rise in the influence of in-house counsel.
Roughly three-quarters of general counsel said they had taken on more active roles in their companies since the recession, including taking on additional responsibility for corporate governance.
At the same time, technology and the movement of business activity to emerging economies, particularly to countries in Asia, are speeding up the changes law firms are facing.
The report purports to apply around the world, so it’s interesting to consider what’s happening in Canada. Here, firms say that while they’re feeling the pressure to provide greater value to their clients, the pace of change is still behind what’s happening in places like Britain and the United States.
Lawyers here are getting more requests to provide discounts, but Canada’s relatively strong position going into the recession has meant firms here didn’t feel the effects as emphatically as their counterparts elsewhere.
Of course, our financial sector didn’t crash, and the fact that the Canadian legal sector tends to be less leveraged with high-priced associates than American firms has allowed lawyers here to escape mass layoffs.
To be sure, the last year or so did present many challenges, but Canadian firms have remained fairly stable through prudent management and controlling costs.
The question, however, is whether that will continue to be the case and whether big firms here would be wiser to initiate changes rather than finding themselves forced to adapt later. The easy and obvious answer is that getting ahead of the curve is usually the best approach.
The Canadian economy in general has experienced several shakeups in recent years that have caught sectors off guard. In the early 1990s, we experienced a painful restructuring, particularly in the manufacturing sector, due in part to free-trade agreements with the United States and Mexico.
Since then, the rise in the value of the dollar, the shift in economic activity to China, and changes in the auto sector have sparked additional restructuring.
The lesson for law firms, then, is that eventually the forces of change will catch up with them. In Canada, we’ve at least seen firms expand their operations overseas in order to get a piece of what’s happening elsewhere.
But in terms of adapting their cost and business models to increased competition and the push for value, they’d
do well to move more quickly.- Glenn Kauth
