It may seem a facile assertion, but at their heart, markets are merely the sum of choices made by individuals. Supply and demand, transparency and liquidity – these are all elements of an efficient market but, at its core, the price you get for any asset is an expression of individual choices. If lots of people believe a semi-detached house in Hampstead is worth millions, it becomes so. People can call the price ridiculous; but if enough choose to pay, it stands. As such, the study of markets is about the choices that people make, rather than the ones they profess to make.
With that in mind, what can we divine about the legal services market at a time when many clients are calling for commercial law firms to offer better value? Well, to judge by a recent report commissioned by Eversheds, a neutral observer would conclude there is a considerable gap between what clients and law firms profess to value and how they actually behave. The report, dubbed Law Firm of the 21st Century, acts as a reasonable mirror to the received wisdom of the profession, both for private practice and corporate counsel. We learn that the Legal Services Act is expected to have little impact on the upper end of the profession, ‘expert’ legal advice is unlikely to be commoditised, clients reckon the magic circle does not represent value and many think current rises in fee levels are unsustainable.
