Bye Bye Midsize, Hello Enterprise?

There’s been an ongoing, if not growing, drumbeat about the squeeze on, and apparently diminishing numbers of, mid-sized law firms. To be clear, a mid-sized firm is in the eye of the beholder but let’s say it’s somewhere north of a 10 lawyer firm and south of a 100 lawyer firm. I choose these cut-off points because that’s where the groups tracking these sorts of statistics draw convenient chunks. A recent article in the Canadian legal press talked about this phenomenon again, and it got me to thinking: if (and that’s a big if) the mid-size firm is disappearing, will that create a vacuum that will cause technology and publishing companies to shift their attention even further away from the solos and small firms?

I don’t think the solos and smalls are entirely neglected, but I’d say that the products that are available tend to be focused on the enterprise level of the National Law Journal top 250 and the member firms of the International Legal Technology Association.  In fact, the ILTA has a great array of documents outlining technology use at larger firms (although some would fall in my mid-size category).

If you take a look at the American Bar Foundation demographic numbers and the numbers from the Canadian Federation of Law Societies, you can get a sense of how big the pool of lawyers is in each country.  It seemed to me that there was a shift (as of 2000) in the US, of firms towards the higher end.  Solo and small firm practice seemed to remain about the same from the 1980s onward (solos roughly 50% and lawyers in small firms about another 15%).  Canada seemed to be less volatile, with the solos and smalls still accounting for about 65% (I compared 2000 and 2006 statistics) but mid-size holding their own.  Two mid-sized firms cratered here last year, so perhaps some of these numbers will shift to reflect the new homes to which their lawyers went.

If the center of the legal vertical market disappears, though, at what point will solos and small firms start to see:

– vendors stop developing products for the 1-10 lawyer firm, or at least starting to develop more quickly and frequently for the larger firms?

– publishers stop selling or developing product slices that are affordable, and informing the 1-10 lawyer firm that they exist?

 

It would seem to me that the investment in the small firm (and smaller sale) becomes more problematic when you are selling either a very small product or a very large, enterprise product.  The technology development needs, or electronic product licensing, would seem to be sufficiently different for those two audiences as to make it less practical to focus on both ends of the market.

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