The big squeeze is coming: Why it’s important to know if your practice is bespoke or precedent?

Hall Wang penned an interesting post on the Tom Spencer blog over the weekend that looked at two of the different types of consulting – Bespoke and Precedent (Bespoke and Precedent Driven – Understanding the Two Different Approaches to Consulting).

Wang explains the difference between the two as being:

Bespoke: This approach is like making a custom-tailored outfit whereby the focus is on what is unique about a client’s situation and then crafting a customized solution for the client. The mindset in this approach is to think about what might be possible to best fit the client’s needs.

Precedent driven: This approach is similar to the way you bake a cake using a cookbook; following the recipe, but making adjustments as time and available ingredients necessitate. The mindset is to find proven precedents and use them as a guide to provide reliable client recommendations.”

I like Wang’s terminology. I particularly like Wang’s use of ‘precedent driven‘ – an alternative to the stale and often misused ‘commoditised‘. It’s smart language, but I think it’s really important that lawyers and their support team understand the difference and workout which of the two their practice sits in.

So why is this even important?

Here’s the reason:- because if you operate a predominantly ‘precedent-based practice’, then you’re going to be feeling the forthcoming ‘big squeeze’ way more than is likely to be the case than if you run a bespoke practice.

What ‘big squeeze?’; my practice is already seeing an uptick in legal work you may be asking – see the latest Altman Weil ‘Law Firms in Transition 2019: Change Efforts Stalled in 2018 as Business Boomed‘ report for why this may be the case.

Well, as I recently blogged The State of Australian Corporate Law Departments Report 2019 has stated that “45% of Australian GCs are forecasting a decrease in their 2019 legal spend” – so ask yourself:- “Where is this massive savings going to come from?” Add to this the recent Thomson Reuters ‘Alternative Legal Services Provider Report‘ (February 2019) stat that

In just two years, revenues for alternative legal services providers have grown from $8.4 billion in 2015 to about $10.7 billion in 2017. This represents a compound annual growth rate of 12.9% over that period.

and it doesn’t take Einstein to tell you that a big (or bigger) squeeze is coming and that the middle – precedent-driven – market (where the majority of the market players sit) is going to be the epicentre of that big squeeze.

But knowing and understanding this is very important. It helps take you – as lawyers, business developers or leaders – a long way to understanding that in reality very few people want or need bespoke legal services; but what the really really really don’t want is a precedent legal service dressed up with a bespoke ‘full service’ price.

As always though, interested in your thoughts/views/feedback.

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