Value 4 Money Legal Support
I recently wrote a small post Of The Urgent Need For Cost Efficient Legal Services. A key problem identified is the traditional structure of (international) law firms. But also the traditional time-based provision of services, which is the cornerstone of traditional law’s foundation, adds to the problem.
As a result, for many startups and SME’s worldwide, quality legal support remains a very costly affair with the result that the risks of operating largely without legal support appear acceptable in view of the high cost for (international) legal support. Should the risks materialize, the effects are often devastating.
I do not, however, only want to point out the problem. There are easily multiple solutions to the problem. But it takes some courage on the lawyers’ side to offer them and a certain confidence on the clients’ side to trust that high-quality legal support can indeed be very low cost compared to today’s overwhelming practice of unduly high legal fees. And ‘low cost’ to me means 20% to 30% of the fees traditionally charged for international legal support.
I did the math and come to the conclusion that today’s legal costs can be reduced by 70-80% and still produce very profitable law firms.
To address immediately the first concern that arises: A cost reduction of 70-80% is possible without any reduction of service quality. In fact, lowering the cost of legal services at the expense of service quality would not be acceptable and could not be a successful operating model. And it is not necessary.
Law firms can reduce the price of their offerings once they identify their main operating expenses. These are easily known (simplifying a little): office rent, staff cost, profit distribution, and marketing. Once these expenses are lowered without affecting the service quality, the fees charged can become very competitive.
Startups, SME’s, big corporations, and all other law firm clients will finally be able to obtain a largely optimized value for money from their legal support provider.