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Aderant Predicts Big Future for Big Law in 2014

Independent legal software company Aderant has published a new research titled, "In Defense of Big Law's Future" that predicts Big Law will continue to be profitable and establishes that the recent negative trends in the legal sector are not isolated, but reflected across other industry sectors.

While most reports have been predicting the demise of big law in the near future, the Aderant report argues that while recent years have been challenging for Big Law with documented declines in demand, employment and revenue in the large law firms, predictions of demise are being made in isolation and not in context with a larger economic scenario.

Aderant has made its broader analysis comparing data on Big Law with similarly placed organizations in 12 other industry sectors and the scenario that emerges is that the declines in demand and operational efficiencies were not suffered by Big Law in isolation, but most other service sector industries were similarly affected.

However, Aderant argues, Big Law has a better chance to recuperate than similar organizations in other industries for three major reasons. First, the services that Big Law provides, knowledge and expertise, are not fungible, and second, new technology actually creates financial opportunity for Big Law, while it creates downward financial pressure for other industries. Third, in contrast to big organizations in other industries, no single law firm in the legal sector has more than 1% of the market share - thus a tremendous amount of opportunity exists in consolidation of business.

Commenting on predictions of doom for Big Law, Chris Grantedlio, chief executive officer for Aderant said, "These dire predictions of Big Law's demise simply do not coincide with what we see every day. Aderant works with 77% of the AmLaw 200 and we see our clients increasingly adopting best practices, and new case management technology to generate higher growth and profitability."

Since 2003, the AmLaw 200 upped its total revenue by 84% and net operating income by 98% (Fifth Annual AmLaw 200 Trends Analysis, July 1, 2013), and according to Aderant, Big Law firms are fully engaged in restructuring and adopting corporate practices in tune with today's economy and knowledge environment. The comparison made with other industries in the service sector that underwent radical changes and financial distress shows, in fact, that Big Law stands ready for long-term stability and growth, rather than losing ground.

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