Friedrich Blase, Global Director in Legal Managed Services at Thomson Reuters, is warning traditional law firms – especially the larger ones – of the potential threat to their existence of alternative legal providers, including the growing range of legal-market ventures and forms of disruptive technology. Blase believes that alternative legal providers could present an “existential threat” to law firms as early as 2020.
Blase says that large firms tend to dismiss the threat because alternative legal initiatives are currently estimated to occupy less than one percent of the market, and to be growing at a rate of 20% per year. Such figures may seem insignificant over a ten-year period, but Blase points out that the growth in market share of alternative providers is more likely to be exponential than linear: he predicts that it will be closer to 50% by 2020. In addition, he says, the “displacement effect” of revenue that alternate providers take from law firms will have an unanticipated impact, and the whole formula ignores the fact that law firms need to grow, not shrink, in order to keep their stakeholders happy.
Blase explores each of these factors in depth, and his points are well worth reading. His message for the long term – particularly for larger firms? Start collaborating with alternative delivery providers sooner rather than later. “Today,” he says, “25% to 50% of the revenue of most large law firms is already squarely under attack. And that portion will only grow over time.”
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