What Big Law Figured Out – Part One of Four
The most dangerous threat to your firm will not announce itself. Clients will not explain why they move on. The work just stops.
Jae Um, legal analyst and founder of Lumio, explained this on the AI and the Future of Law podcast, hosted by Jen Leonard of Creative Lawyers and Bridget McCormack of the American Arbitration Association. In some practices, the phone simply stops ringing. You are left guessing. A client found a cheaper way and the work got done elsewhere. No announcement, no discussion.
One in-house counsel completed a $10,000 matter with a $20/month tool. The former law firm never knew. You cannot measure what you never received.
That is the nature of this threat. Missed matters go untracked, making the competitive loss invisible.
Most firms focus on visible work at risk: commoditized, high-volume matters with price pressure. But a bigger risk is work leaving the firm unnoticed. When clients handle legal matters elsewhere, no one notices until the pattern has continued for months. The key question is not where price pressure appears, but where work disappears before you see it.
The most exposed position, in my experience, is serving clients you barely know. If you do not truly understand these clients’ businesses, you will not spot a problem before it becomes a decision. When a $20/month tool is viable, the client weighs it against your cost. If your value is not clear, they choose differently. They will not say why; they will simply stop calling.
If clients are solely focused on price, the risk of loss is high. Lawyers must be able to communicate their value beyond just the price, including judgment, experience, track record in court, $ won, $ saved, reputation, creativity, references, etc.
A general counsel in Um’s analysis said it plainly: “If a firm isn’t cannibalizing its own inefficient billable hours, we will find a firm that will.”
Take that as a forecast. Clients already have alternatives, and they are signalling what happens if you do not act first.
Um described how this pressure arrives to a room full of managing partners in London. It never comes as one event. New business gets harder to win, and existing matters shrink. Realization rates slip, and it will be hard to say why.
If you are asking the right questions, you are already ahead. A Cleary senior partner advised: envision the business that would put yours out of business. This explains the threat faster than any market analysis.
For each major practice area, ask: how hard is it for clients to solve this another way? The competitor may not be another firm, but a $20/month subscription. If the honest answer is “not very hard,” that area is more exposed than you may be treating it.
The most at-risk work is process-driven: matters where clients with the right tool and some internal capacity can reach an acceptable result without you. Think work that follows a predictable process and produces a predictable result. The work least at risk requires judgment that the client cannot buy off the shelf, especially where the stakes are material and getting it wrong costs far more than the tool costs to try. Most firms have both: the question is whether you know which is which.
If your firm is smaller, you have a real advantage here. Close client relationships are an early-warning system, but only if you use them that way. Ask clients directly what they are handling without you. Learn what tools or services they are already using. Knowing this before you need it gives you time to respond.
This is not a cause for paralysis. The same disruption pulling work away from firms that are not paying attention is creating real opportunity for those that are. If you understand what you deliver and can make that case against the alternatives, you will be in a stronger position at the end of this period than you are now.
Don’t wait for silence to signal risk. Contact clients now and ask specifically why their needs are changing. Taking initiative to reach out demonstrates attentiveness, not desperation. Approach these conversations as opportunities to help clients with their challenges and reinforce your commitment to their success. Be proactive: schedule conversations, request candid feedback, and use what you learn to adapt immediately. The managing partners who do this consistently and directly are the ones who stay ahead of shifting client expectations.
This article is the first in my “What Big Law Figured Out” series, inspired by the AI and the Future of Law podcast featuring Jae Um. In Part two, learn how to design AI investment around a distinct competitive strategy, not by following others. Part three will walk you through essential foundations to put in place before any investment discussion. Act on these insights today to outpace competitors tomorrow.
