We’ve read about it to the point of exasperation. The “new normal” for the legal services market. Basically, a shift in buying behaviours in a changing market environment, brought about by a compelling combination of external factors over a period of time, with increased competition from new market entrants thrown into the mix.
I don’t think it needs to be explored in any more detail here, but I do think a different term should be used to describe this state of affairs; perhaps something like “normal”.
This state of heightened buyer influence generally seems to be recognised by many law firms, albeit with varying degrees of reluctance and perhaps also a measure of “things are picking up again” denial.
Still, some evidence of progress seems to be appearing, in the form of increased focus on things like fixed pricing, project management, cost efficiency and increased investment in technology, marketing and social media. Whether these measures are merely cosmetic or truly transformational remains to be seen.
We hear less discussion about what this all means for the Bar and I think sets of chambers can be forgiven for feeling somewhat insulated from its effects. This is not because they are in any way immune to them, nor can they afford to be complacent.
However, market pressures of this sort are not a new phenomenon at the Bar, buyer power having been an ever-present factor in their part of the market for a very long time.
Despite its obvious intent to broaden its market appeal, the Bar remains predominantly a referral profession. The vast majority of the Bar’s customers – as distinct from the ultimate consumers of its services – are solicitors. This has been the position for many years, as a result of which solicitors are generally experienced and sophisticated buyers of the Bar’s services. They invariably know the market well, are experts in the relevant legal subject matter and are therefore capable of making careful, informed assessments of the expertise, quality, price and general suitability of counsel before engaging them.
Additionally, this process is moderated by clerks, who – if they are doing their job properly –add an additional layer of balanced scrutiny to ensure fees and terms make commercial sense while also offering sufficient value and service standards to encourage the continued flow of business.
This set of conditions, which has existed for many years, has necessitated continual, incremental improvements to the services of barristers in order to remain competitive. In other words, solicitors have for a long time been keeping barristers on their toes. Contrast this with the wider market space occupied by solicitors and their clients, where the application of such levels of buying sophistication has been much less prevalent and the disparity in knowledge between the parties has placed the balance of bargaining power firmly in the hands of the law firms.
While this has made for very comfortable commercial conditions for law firms over a sustained period, the downside is a lack of “match fitness” when it comes to responding to what now come as quite sudden market pressures. That is not to say law firms are ill-equipped to deal with them but I do think past conditions have left them ill-prepared.
Of course, this does not mean the Bar has nothing to worry about. It needs to respond to market pressures as much as anyone, but it is better conditioned to do so than many believe, including perhaps itself. Recognition of this will be key to building the collective self-confidence needed to enable it to step out of its comfort zone and deal effectively with the opportunities and threats that will inevitably be presented by, among other things, BSB entity regulation.
So yes, the Bar is in decent shape. But barristers should take no comfort from these words. You can be sure the next normal is just around the corner.