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21
Jan 10
Thu

The Economist reports on professional services industries

This Economist article opens with:

What do you say to a recent law-school graduate?

“A skinny double-shot latte to go, please.”

Ouch.

Though the best will gain at the expense of the rest throughout professional services, the legal profession seems likely to undergo the most profound structural changes. For the first time—long after IT and finance departments went through the same experience—the corporate legal departments that hire law firms are under great budgetary pressure, and are thus demanding much better value from them.

In a recent paper, “The Death of Big Law”, Larry Ribstein, a law professor at the University of Illinois, argued that after decades without changing, law firms are likely to have an outburst of experimentation with different business models: even the venerable and lucrative “billable hour” method of charging clients is in doubt. The experimentation may include more firms abandoning their traditional partnership model to go public, following in the footsteps of an Australian law firm, Slater & Gordon, which went public in 2007.

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