War for work: global competition hits profits hard

The increasingly competitive environment of the international legal market is causing some firms to pitch for work at prices so low they will see no return, the former chairwoman of global giant Baker & McKenzie told delegates at the fourth annual law firm global management forum in London last week.


Christine Lagarde, now chairwoman of Baker & McKenzie's global policy committee, claimed that this approach - used in a desperate bid to win work in a market where legal services providers are abundant - has created a buyers' market.


Ms Lagarde added that firms are at war not just for work, but also for talent and clients. This was demonstrated by the increasing number of lateral hires and the poor management of conflicts, she said.


Brad Hildebrandt, chairman of legal management consultancy Hildebrandt International, said recruiting the right people presented the greatest problem for law firms, as there is a shortage of talented professionals at a time when those in the baby boomer generation are looking to retire.


He said: 'The free movement of lawyers is the single thing that has caused the most change to the legal profession in recent years.'


On a positive note, Mr Hildebrandt added that competition for the best people has caused firms to spend more effort in making their firms places people want to go to every day.


David Harrel, senior partner at City practice SJ Berwin, agreed: 'People are our biggest strategic challenge. People no longer join a firm intending to stay with it throughout their professional life.'