Commoditisation report says law firms’ business model becoming ‘rapidly undermined’

The commoditisation of legal work is rapidly undermining the traditional business model of law firms, according to a new report.

“The trend is clear, the blow is yet to come” - published by TGO Consulting - examines the contradiction between clients who see most legal work as commoditised and lawyers who still consider most of their work bespoke.

The report includes results from a survey of 100 business law firms across Europe in May 2016.

Of those firms surveyed, more than 70 per cent said at least 70 per cent of their legal services are bespoke and complex, rather than routine and commoditised - contradicting a survey of general counsel.

The report questions whether law firms are suffering from “such a degree of commoditisation blindness that they have lost touch with their own market”.

Lisa Hakanson, director of research and operations at TGO Consulting, writes in the report: “Few of us have failed to notice how clients are changing the manner in which they purchase external legal services and their efforts in putting pressure on pricing. At the same time, law firms are reporting more or less business as usual.

“Based on in-depth interviews with general counsel, conducted by Willem Hengeveld and Jaap Bosman from TGO Consulting, and a quantitative survey amongst senior lawyers in Europe, this report examines the level of commoditisation in the legal services market and how this is affecting its players.

“We would like to thank everyone who contributed to this research. We find the results thought-provoking and hope that our conclusions stimulate a further debate.”