The Big Shakeup

As law firm relationships go dark, will clients benefit?

If the inaugural report is any indication, LegalVIEW Insights, a new series analyzing trends and issues from Wolters Kluwer’s ELM Solutions, which uses the world’s largest body of legal performance data, is worth keeping an eye on. Compiled by Nathan Cemenska, director of legal ops and industry insights for ELM, the data from 2020 show that lawyer-client relationships took a big hit. “Last year, a significant number of relationships between law firms and their clients went dark – not a single legal invoice was sent in these cases,” says Cemenska, who notes that 16% of relationships were put on hold for all of 2020, and 90% of law departments reduced their total number of active providers. “With the economy coming back, those gaps are going to be filled, but it won’t always be by the firms that lost the business.”

As a result, Cemenska believes we may see a “major reevaluation” of how the legal industry operates. “ALSPs, the Big Four, increased recognition of opportunities to insource, and the pause of 2020 may conspire to create appreciable change in sourcing patterns,” he says. But don’t count Big Law out just yet. “The truly sophisticated firms are sure to transform into opportunities what their less creative competitors can only see as threats,” he says. “Perhaps the most realistic view is that who succeed and who fails in this new world has less to do with what category you fall into – law firm, CLD, insourced team, ALSP, etc. – but whether you exceed category peers in your ability to see the world through new, post-pandemic eyes.”

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