The future of the Australian legal market is an uncertain one, and firms that fail to adapt will struggle, an industry leader has warned.
According to Jagger, top tier commercial firms have dropped their partnership numbers by around 25 percent on average since 2008, while also reducing their graduate intake.
“I think that it’s fair to say that Australian law firms are excellent … but we’re over lawyered and unless the market expands rapidly and I can’t see that, then the competition for market share is going to become more and more intense,” said Jagger.
New entrants to the market may also struggle to maintain dominance, despite attempts at chasing different segments.
“I also think that some of the UK and US firms that have entered the market may struggle when they realise just how competitive the market is that they have entered in to,” Jagger said. “So it will be interesting to see over the next few years which ones succeed and which ones fail.”
Jagger said that traditional firms may have to adapt in order to keep up with the new players.
“Some traditional law firms will become what we call now alternative legal service providers as well, so instead of the market share continuing to contract their traditional services, they are going to be forced to expand their services to maintain market share,” he said.
“You might see this big divide emerging between the global providers and the local specialists and boutiques with not much in between,” he predicted.