Have Law Firms Failed to Anticipate Cord-Cutting?

I was listening recently to a fascinating podcast about "The Evolution of ESPN" on The Ringer .  In the discussion, Bill Simmons, relayed that in 2013, ESPN had no idea or appreciation for the impact of Cord-Cutting and that Cord-Cutting was a threat to their business model.  And prior to 2014, you never heard Disney, ESPN, or Wall Street talking about "subs" (subscribers).  But that's all you hear about now when discussing ESPN and Cord-Cutting.  This had me wondering, have law firms failed to anticipate the impact of alternative legal service providers?

Mark Cohen recently wrote in his article entitled The Legal Industry is Undergoing More than a 'Dance Around Change', "There's a new buy/sell dynamic; legal consumers are themselves re-engineering the delivery of legal services."

He went on further to write:

"This transformation has occurred in no small part because as businesses became more complex, the alignment of in-house counsel with the enterprise became even more crucial.  Corporate counsel differ from their law firm counterparts because they are both defenders of and business partners with the enterprise--law firms tend to play defense only.  The alignment of elite service providers with customers also differs from firms.  The top service providers are transparent, digitized (e.g. always accessible and agile), metric drive, result-oriented, tech and process-enabled, and efficient.  This is not the traditional law firm/client dynamic, either."

The transformation has also occurred due to technology and ease of access to information.  Clients used to rarely question how law firms delivered legal services because it was often conducted in a black box, shrouded with mystery and Latin.  That is not the case anymore.   

Cutting the Cord is akin to unbundling legal service delivery from law firms to alternative legal service providers.  Managed services run by alternative legal service providers on behalf of their clients is growing.  Law departments are pairing law firms with alternative legal service providers in their supply chains.  We recently wrote about the results of our own 2017 Legal Market Survey where law departments strongly indicated they wanted to see law firms working with alternative legal service providers. 

While law firms may continue to resist this change, they may find themselves in the same place as ESPN.  Scrambling to figure out how the industry changed around them due in large part to client demand and technology.