Lawyers and CPAs are good at business
What will 2015 bring for the law firm ?: Changes, but not a revolution
It doesn't seem to be a good time for the business advisory firms: New competitors are making the established firms dispute their traditional territory, while at the same time clients are becoming more and more price-sensitive when awarding contracts. LTO asked the managing partners of various large law firms for a forecast for the 2015 legal market.
The rumor mill is simmering: Business, especially for Anglo-Saxon law firms in this country, is currently said to be bad. They are less likely to be able to enforce their high hourly rates with clients, and there is a risk of falling sales. The management of the law firms is therefore forced to take countermeasures: they will focus more on certain areas of law - with the result that other areas will be decimated. Loss of partners is also under discussion.
Asked by LTO to take a look inside the crystal ball and explain where the challenges in the law firm market in 2015 lie, the managing partners of some large law firms prefer not to make any official statements at the moment. Other representatives of the law firms, on the other hand, are very relaxed about the young year. However, everyone agrees that the competition is getting tougher and that the firm's strategy should therefore be regularly scrutinized.
"Firms that pursue a clear strategy, are well networked internationally and consistently rely on premium quality consulting services in all areas are well prepared for future challenges," says Dr. Tobias Bürgers, co-speaker at Noerr. With this strategy one has gained market share in a competitive environment in the past few years. So the best consultants will always secure a large piece of the pie - come what may?
The cost pressure is increasing
Dr. Ralf Thaeter, Managing Partner of Herbert Smith Freehills in Germany, is convinced that this simple calculation does not work out because more hungry people are fighting over the cake. "There are still more foreign law firms entering the German market that are in cutthroat competition; new work will not be created to the same extent. At the same time, new providers are emerging through spin-offs. Overall, the number of lawyers providing business advice has increased in the last 20 years increased ", he points out. Thaeter leads the fortunes of one of these newcomers in the German market. The long-standing Gleiss-Lutz partner has been building up the local presence of the British law firm since 2013.
The logical consequence when the range of consulting services increases: The pressure on prices increases. "Large companies in particular use - quite legitimately - targeted instruments and processes that force quality and price competition," observes Dr. Andreas Meissner, Managing Partner of Taylor Wessing. "One example of this are the frequent panel pitches. But individual projects are also being awarded more and more frequently by means of bidding procedures, in which not only the legal departments, but also purchasing, have at least one decision on the award."
Dr. Hubertus Kolster, Managing Partner of CMS Hasche Sigle, observes that the general counsel of large companies are under pressure to cut costs. "Even large M&A deals are often tightly calculated, so flexibility in the fee structure is necessary." For example, caps, lump sums or blended rates are required for due diligence and different hourly rates are agreed depending on the phase of the transaction.
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