Exploring Varied Negotiation Opportunities: The Way Forward

Abstract 

Introduction 

In today’s fast-changing, dynamic legal market, buyers of legal services have become well-informed and demanding in their pursuit of streamlined legal services available at economical prices. This has triggered a gamut of approaches regarding how legal services are priced, sold, and managed. Amidst this scenario, corporates are coming up with new approaches while negotiating with law firms to gain better predictability and transparency in the delivery of legal services. Law firms also face the challenge of increasing their profitability because profit per equity (PPEP) and revenue per lawyer (RPL ) are significant yardsticks through which law firms’ financial health is evaluated. It is an important criterion followed by companies when they plan to include a law firm in their register. 

This whitepaper will provide insights on how Fortune 500 companies negotiate with law firms to maintain their margins, what are the factors behind slow acceptance of change in the legal market, the shift from a seller’s market to a buyer’s market, what are the negotiation approaches that can be used while law firms attempt to enhance their profitability, and how law firms boost their profitability, among others. 

Problem Statement 

As corporate buyers seek law firms that can meet their expectations concerning pricing and process management, the law firms seek a balance between staying competitive in terms of value-added pricing and maintaining profitability to attract and retain personnel. These law firms also present a convincing image to corporates seeking external counseling assistance. Several corporates are looking at exploring new negotiation opportunities in the future rather than simply bargaining to save costs.

This whitepaper will propose a solution for the following questions: 

• What are the general negotiation levers used by corporates to negotiate with law firms?
• What are the factors behind the slow acceptance of change within the legal environment?
• What are the factors influencing the increasing negotiation power of the buyer?
• What are the diverse negotiation opportunities that can be explored by corporates going forward?
• How are law firms boosting profitability and maintaining margins?