Posted by: johnocunningham | August 12, 2014

Client Search for Value Takes M&A Work to Smaller Law Firms

It was not so long ago that the largest law firms in the country were the default choice for merger and acquisition work that typically rakes in $43,000 to $272,000 per transaction (figures cited by CounselLink.com).

But The Wall Street Journal reported on Tue. Aug. 5 that 2d tier law firms (with 501 to 750 lawyers) now top the charts with 37 percent of all M&A legal revenue. The Leviathan firms with more than 750 lawyers have dropped their share to just 30 percent, and the regional and local firms of fewer than 500 lawyers now account for 33 percent of revenue (which is 3 percent more than the top tier firms).

Similarly, smaller “mid-sized” firms of 250 to 500 lawyers have nearly doubled their market share of “big ticket litigation” from 2009 to 2013, according to the Journal.

What is behind this trend?

I think it is the persistent and growing search for value. The emphasis, even on “bet the company” matters, is no longer just on results. It is about results at a competitive price.

Thus, law firms need to sharpen their marketing communications, demonstrating to clients and prospects how they are delivering value, as well as results. Firms and individual lawyers need to show how they are using process improvement, project management skills, selected technologies and better training and collaboration to deliver faster, less expensive and higher quality results.

Just saying “we’re the best” does not cut it any more. You have to prove what you promise. Showing how you have cut your average transaction costs, your typical production times and your overall budgets for everything from commoditized work to big-ticket litigation and large-scale transactions is critical.

Tracking and communicating the data is a difference maker for any law firm willing to do it. Corporations do it all the time. Law firms – some – are just now getting it.

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