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The economics of law practice (and why small firms have an advantage over big ones)

As many of you know, there is much hand-wringing going on in big law firms about whether their current economic model is viable.  (I for one don’t think it is).  Here is a good article about potential changes to law firm structures.  A couple of quotes from a law firm consultant jumped out at me:

“Clients are unwilling to pay the high fees unless it’s extremely specialized work.” 

“Firms have been run like a business in terms of pursuing profitability.  They have been able to increase their rates every year, and that can’t happen anymore.”

Those thoughts certainly ring true for me.  Why would a client pay a big firm (with all its overhead) for employment law counseling and litigation when a small firm or sole practitioner can provide the same quality at a lower rate?  Same expertise, greater efficiency.  Just asking!

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