You can make a strong case to support the assertion of Peter Kurer, UBS’ general counsel, that the legal services market is “dysfunctional”. Kurer argued in a recent Legal Week debate that surging profits at leading firms were largely the result of rising legal bills and proof that the market for law just isn’t working properly. His comments are timely, coming so soon after the Commerce & Industry Group’s recent report on fees once again illustrated simmering client anger over costs. With partner profits having more than doubled over the last decade, it does seem evident that something is not right with the market.
Yet it seems hard to fathom why general counsel believe the primary fault lies with advisers. Ultimately, the responsibility to assert purchasing power is the client’s. Legal advisers, much like any other service provider, will charge what the market will bear, no more. So the fact that fee inflation has soared during the period in which the panel system has gained currency raises awkward questions for clients.
