I came across an article in Crain’s Chicago Business entitled “Why law firms are turning to non-lawyers for sales help” where they talk about law firms hiring sales/marketing professionals to develop business. In a profession where advertising was once banned, this is considered a radical move. According to the article “law firms are reacting to customers who have learned how to strip out components of legal work and value them accordingly, an unbundling of services that echoes what hit the computer industry decades ago” and “what’s happened is that the buyers have become smarter than the lawyers.” Score one for Strategic Sourcing.
But law firms are fighting back. Many have moved toward hiring business development professionals to sell their services while others have provided sales training to their lawyers. Some firms are experiencing up to a 60% increase in client requests for proposals where that same work was automatically awarded in the past. The economy and competition has forced law firms to think more like a business. But getting a lawyer to think like a sales person is not without its challenges. Many feel that they didn’t go to law school to become a sales person. “Traditionally, lawyers believed their knowledge and expertise spoke for itself, and it would be a sign of defeat to start marketing.”
Another role has emerged as law firms fight against Strategic Sourcing – Pricing Director. Two years ago there were only a few such roles and now there are over 300 across the industry. The upsurge has been caused by pressure from clients. Clients have adopted more savvy purchasing practices and law firms have been forced to react. In 2013, two thirds of law firm revenue involved flat rates and other “alternative fee arrangements” such are pre-negotiated discounts to billable hours.” The days of open ended agreements and highly paid lawyers billing for work that could be done by paralegals may be over. Some law firms are starting to be more judicious (no pun intended 😀 ) in pushing lower value added work down to paralegals, contract attorneys, document processors or to low cost countries (e.g. legal research in India) as a reaction to the market.
This shift has not happened without a great deal of pain. The long standing culture within many law firms can be a tough nut to crack. Business development professionals entering these firms, name decision making as the number one biggest issue they face. Partners see the change as optional and need to be convinced that the shift is necessary. In addition, sales cycles for professional services firms can take two years or longer which can be frustrating for both the sales person and the firm. Like any change, it takes time and expectations need to be managed along the way to be successful.
So what does this shift mean for Sourcing professionals? Where legal services were once a sacred cow for strategic sourcing – that is changing. Use this as a call to action to at least consider legal services as an opportunity. This does not mean you need to switch to new outsides law firms but can be a way to add value to your internal legal group by helping them to buy smarter. If law firms have recognized the market has changed by thinking more like sales people, then it’s time our internal business partners (legal) recognize that change and capitalize on it.
Let us know what you think and join the conversation . . . . . .
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Anne has been leading consulting and financial management organizations for over 25 years. She has extensive expertise in Strategic Sourcing, change management, contracting & contract management (both the buy side and sell side) organizational design and supply chain management. Anne has a passion for collaborating and educating her clients while helping them to uncover hidden value in their organizations. In addition, Anne has been named by Supply & Demand Chain Executive as a “Top 100 Provider Pro to Know” every year since 2007 and a 2013 Top Female Supply Chain executive.