In these times, clients don't need to be told what their risks are - they need to be advised on how to fix them. That was just one of the views aired last week at a forum on the legal services industry, held at the University of Technology, Sydney.
The forum featured panel members hailing from different backgrounds, including a journalist, business development manager, and a managing partner. Discussion centred on how law firms have been affected by the downturn and what the future holds for the region's legal fraternity. Managing partner of career development practice Bright & Associates, Jim Bright, warned that Australian law firms must "be careful about complacency," as they are now in competition with bigger international players for their stake in emerging markets."We need an increased engagement with Asia - we can't just rely on the benefit of the doubt of having a good relationship with China and their endless resource needs," he said. Bright, who is also a psychologist, suggested that a strategy of "reinvention" was needed in the business models of legal firms to promote flexibility and competition.
However, the director of marketing and human resource at top-tier firm Corrs Chambers Westgarth, Cindy Carpenter, argued that while it is too early to say that firms are already adopting alternative business models in response to client needs, discussions around billable hours has heated up. According to Carpenter, a former principal at the Boston Consulting Group, the discussions are resulting in an industry "fear that is creating a price war between firms," she said. Firms have been pressured with cost-cutting and alternative billing options - Corrs has even been asked by clients to place secondees to in-house positions, she noted. The firm has also been sending work to lawyers in cities with lower charging rates, like Brisbane, and re-tendering work. However, Carpenter noted the strategy for lawyers was to demonstrate their added value to the client, by not "discounting too readily" and expressing their reliability, learning how to scope risk and promote discussion on how to add value to engage clients.
Risk and risk-sharing with law firms was certainly an issue on corporate minds. A former Freehills lawyer in the audience noted that the overwhelming and complex regulations in Australia were a major challenge for the legal industry to overcome, particularly in takeovers and other transactions. Lawyers should provide more direction, he argued, not just give advice on what risks are involved in takeovers or mergers. Chris Merritt, the legal affairs editor of The Australian newspaper, noted that Australia may be "over-governed" and many firms grapple with a number of different rules between the states.
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