According to Mr Lowry, the legal industry is going to continue to experience downward pressure on legal fees, and that is in part due to the economic consequences of COVID-19.
“There will continue to be more of an appetite for creative billing structures – less billable hours,” explained Lowry.
More than just an emphasis on the way that legal services are priced and billed, there appears to be a fundamental shift in the perceived value that a law firm can provide to their clients.
From Lowry’s perspective, there is going to be a change to the type of service and responsiveness that clients want and need.
“I think it’s the nature of the relationships which are probably going to change. I think that the speed of the events over the last year has meant that businesses or clients will now more than ever place real value on deep relationships,” he said.
“And by this, I mean that businesses are going to prize those advisors that understand their clients really well and this is because understanding clients really well helps service providers respond really swiftly and also, appropriately to the challenges that their clients are facing and often challenges that the clients have never faced before.”
“So, I think that means that there is going to be more tailored approaches to developing relationships with clients.”
According to Mr Lowry, this will be reflected in more secondments and more established partnerships.
“When people are under pressure, as a lot of businesses have been, they will obviously want value for money, but more importantly, they want to go with someone who they know and they want to go with someone who knows them and what they’re going through,” he explains.
The value of the in-house legal function has also been heightened since the onset of the pandemic.
“I suspect that many organisations have come to recognize the ability of good in-house legal teams in solving a diverse range of issues quickly and under pressure,” said Lowry.
“I think, simply, this will ensure that good in-house legal teams have a seat at the table when key decisions are being made.”
Whilst the US has observed a subtle shift to in-sourcing legal work and investing in additional in-house resources, he does not believe that this will occur in Australia, at least in the short term.
“I think that the economic consequences of COVID-19 mean that a lot of businesses will be under pressure to cut costs. And so, I don’t think instinctively businesses are going to look to replace external legal spend with internal hires, at least in the short term,” he said.
“However, I think as time goes by and as in-house legal teams continue to be at the table as decisions are made, I think that in some businesses there will be a move towards bringing some work in-house where that makes sense economically.”
According to Lowry, we won’t be witnessing a seismic change, at least not in the short term, but of course, time will tell.
To learn about the significant transformation of Ausgrid’s legal function along with advice and tips for legal leaders, check out Lawcadia’s Fireside Chat with Nigel Lowry.
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