As law departments increase efficiency, BigLaw must unbundle to survive

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Ron Friedman’s  post on the Prism Legal blog poses an interesting question:  will unbundling routine services from bespoke work, normally charged at the same rate, undo BigLaw?In this post, I argue that unbundling is the only thing that can save BigLaw in the wake of increasing law department efficiency.

Ron draws on a recent New York Times article, More Cracks Undermine the Citadel of TV Profits that offers the legal market lessons on how unbundling can shake-up established players.  BigLaw has always faced pressure from smaller, more nimble firms but it’s been able to cope with that pressure pretty well. This is akin to cable companies facing pressure from alternatives like iTunes and Hulu; the bundle still holds strong but something new is lurking on the horizon.

John McCain just introduced the Television Consumer Freedom Act of 2013 into congress. If passed, the law will give cable customers the option of subscribing to channels a la carte i.e. unbundling. While cable customers have to wait for this bill to pass or risk spending even more on a la carte shows on iTunes, in the legal industry, the unbundlers are already here!

If the emergence of LPOs and firms like Axiom isn’t enough to get BigLaw to unbundle, it only has to look at some of the contract automation technology making its way into law departments today. ContractExpress is one such technology and it allows business users to request contracts via Safe Self-Service Contract Creation. By eliminating the review of standard contracts, ContractExpress frees in-house attorneys for higher value work that would otherwise be outsourced to BigLaw.

In fact an April 19th Legal Week article (subs. req’d), Feeling the squeeze – GCs under pressure to cut costs are pushing for more value from their external lawyers, states that, “bringing more work in-house is the most preferable option to help cut legal spend…” As law departments increase efficiency, Biglaw must unbundle to survive and focus on their biggest value-add; bespoke work like M&A and litigation.