The party’s over — can I sell you an aspirin?

There’s nothing like a bit of market melodrama to bring out the prophets of legal services doom. You’ve heard the spiel: the party’s over; the legal market is an unsustainable bubble; law is, like, totally backward and must embrace stuff that has been happening in other industries for ages. Hmmmm.

 

Now it may well be that the dramatic growth of the largest legal firms over the last 20 years has run its course. Likewise, fundamental change could yet be forced on legal service providers by technology, clients or both. But, as yet, I have yet to see a trigger point to back up the more extreme claims. Also, some of the doom-mongers haven’t come up with much of a reason for revolution beyond the fact that, er, they think that there should be.

Of course, some would say that the humbling of the global finance industry could be that trigger. But though the likely prospects of a smaller, more heavily-regulated institutional finance community will slow the growth of corporate law firms a little, there’s not much to indicate that, in itself, it will prove the Waterloo of Global Law. Law firms are privately-run businesses operating long-term employment structures based on heavy alignment of the interests of owners and managers. They also operate with little or no debt and have widely diversified business lines. They do, in short, run radically different business models to banks and, on that basis, I wouldn’t read too much into the damage being inflicted on the securities industry. And anyone who thinks that structured finance during the debt boom was anything more than a lucrative niche for the majority of corporate law firms, doesn’t know much about the economics of law.

Others make the mistake of confusing what clients say when letting off steam with the decisions they make on the ground. Legal services may be a “dysfunctional” market as then UBS legal head Peter Kurer said last year — and there is much to support his analysis — but clients are as much as apart of that dysfunction as advisers. Until in-house lawyers collectively take a long hard look in the mirror and ask how and why they instruct law firms, little will change.

But the main warning sign when reading a polemic on legal services is when you find the neutral author is selling something that — wouldn’t you know it? — represents THE FUTURE OF LAW. Forgive me, if I remain unconvinced.

There are, of course, some genuinely excellent consultants/professional strategists out there concentrating on law. Not many but there are a few, though they tend to be distinguished partly by restraining from penning hyperventilated predictions.

Change will come in law because business always faces change. It may be painful and wrenching or lucrative but the chances are that it won’t be heralded by someone trying to sell you something.