Products and Platform as Next Challenges to Legal Service Providers: How Trusted Relationships May Help

Abstract

Typically, customers have approached law firms only for legal services (“buy”). Increasingly over the last decades, companies have started to build their own legal departments (“make”; insourcing). As a next development, the legal arms of the big auditing firms (Big Four) and other alternative legal service providers (NewLaw) are starting to enter the market, competing with the traditional legal service providers. And finally, as the most recent phenomenon, online offers and platforms are putting existing relationships with lawyers under pressure. Depending on the customer’s experience and whether a company has a legal department of its own, the purchase of legal services occurs differently. However, the questions raised and the topics addressed in this context remain the same. Therefore, one must understand and recognize the different facets of every service provider and the underlying relationship. Only then can a customer find the optimal composition and make use of the advantages each of them offers to solve a particular problem. This article investigates the question of trust in a relationship between customer and lawyer, explains why legal expertise is no longer sufficient to win and retain customers, and provides an answer to how lawyers can face the challenge of digitalization. The term “customer” is uniformly applied to both customers of outside counsel and internal customers of legal departments to express the view that providing legal advice is considered a service with customer orientation in both cases. (This article is a further development of the following publication: Mascello, Bruno (2019), Vertrauensvorschuss vs. Kostenvorschuss – Trusted Advisor?, in: Anwaltsrevue 4/2019, pp. 149–161. There, you can find further comments and explanations, sources and references as well as an extensive bibliography. For the sake of readability and brevity, this article uses the masculine form of pronouns only, but the feminine form is always understood to be included as well.)