The recession period brought a transformation in the legal service industry, as law firms reduced costs, and cut back on staff to stay afloat and to improve cost effectiveness. Small law firms adopted alternate business models to sustain business operations. The wavering economy also affected the client-company relations. In the recession stricken economy, clients hesitated to pay high fees for regular legal services, and instead inclined towards alternate methods such as bartering services, to pay for the required legal advice.
The economic conditions and the subsequent changes are resulting in long-lasting effects in the structure and working of law firms. With the impact of recession slowly ebbing and the economy back on growth mode, demand for legal services is picking up. However, cost reduction efforts continue to be prominent at law firms, leading to more staff retrenchment. Additionally, law firms are witnessing continued demand for discounting, especially of routine work.
With the legal services market witnessing a long period of stagnancy during the recession, several large law firms are providing clients with increased value and differentiation through Legal Process Outsourcing (LPO). Though law firms initially remained hesitant to outsource the legal work, adverse economic conditions placed pressure on law firms to minimize overhead expenses related to general administration, accounting, knowledge management, paralegal, clerical, information technology, sales and marketing.
By outsourcing majority of overhead jobs to offshore destinations, law firms are able to save significant costs. Factors such as limited resources, increased risk exposures and backlogged legal obligations forced corporate legal teams and law firms, to perform more with lesser resources. Majority of projects originate from the US and UK, and are outsourced to developing countries such as India to benefit from the significant price advantages provided by such destinations. An increasing number of legal projects are now outsourced by Corporate Counsels or by corporate counsel’s preferred law firms.
The global legal landscape also witnessed an increased number of law firms opting for business consolidation. The industry is witnessing cross border mergers and acquisitions as law firms look to expand global presence through the acquisition of smaller firms. Cross border mergers and acquisitions being led by leading firms is in response to increasing cross border trade of technology, services, capital goods and personnel.
The research report titled Legal Services: A Global Outlook announced by Global Industry Analysts, Inc., provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report offers an aerial view of the global legal services industry, identifies major short to medium term market challenges, and growth drivers. Market discussions in the report are punctuated with fact-rich market data tables. Regional markets elaborated upon include United States, Canada, Japan, Germany, UK, France, Australia, China, India, Brazil, and Israel among others. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of companies worldwide.