Hesitance by US law firms to help cut their clients’ legal bills has helped to stimulate the growth of the legal services outsourcing (LSO) sector, according to the managing director of specialist law firm marketing group NCG Strategic Marketing, Phil Nugent.

Writing in an industry newsletter this month, Nugent proposes that a ‘revolution’ in the delivery of legal services is underway, and asks whether traditional law firms have simply become too static to respond to economic changes, or whether they are falling prey to the model of ‘creative destruction’ in which nimbler forms of service delivery are taking their place.

‘I would suggest that the answer to both of these questions is yes, and that a systematic lack of responsiveness has made corporate clients hungry for alternatives’ writes Nugent, who refers to a recent survey of 550 US general counsel (GCs), which confirmed widespread client dissatisfaction with top traditional law firms.

Published earlier this month by prominent legal journal InsideCounsel, the survey found that 59% of GCs think that their law firms don’t understand their businesses, and that 65% think that law firms don’t actively seek ways to drive down costs.

‘If anywhere from one-half to two-thirds of the top law firms in the US are unresponsive to their clients’ needs to keep costs down,’ writes Nugent, ‘doesn’t it make sense that these same clients would be desperately seeking alternatives?’

According to Nugent, we are ‘in the midst of a true revolution in the delivery of legal services’. He adds that such statements typically divide lawyers into two camps: ‘those who have already heard the guns firing and are nodding their heads in agreement, and those who dismiss all the warnings of imminent change as excessive and overwrought’.

Those in the latter camp should think again, says Nugent, as LSO providers have already become ‘large and successful’ entities. He highlights as an example the level of private investment attracted earlier this year by market-leading LSO provider, CPA Global.

Compared to other industries, the legal sector ‘has taken a little longer to see real change take place’, he writes, ‘but it’s happening now. Market forces have finally come to the legal profession’.