LegalWeek.com reported this week that Australia-based fixed-fee law firm AdventBalance “has brought its unconventional business model to Hong Kong with the opening of an office in the city”.
The firm “seconds senior lawyers to clients’ offices for specific projects and transactions; agreeing a fixed payable amount for the period and hours involved”. As Legalweek.com reported: [AdventBalance] “Managers believe their firm is growing quickly while traditional firms are struggling due to the decline of hourly rates and the rigidity of traditional partnerships.”
Hong Kong an excellent target for disruption
Hong Kong is the transshipment point for two-thirds of foreign direct investment in and out of China. Yet, almost all traditional partnership firms in the region are not active in social media – a key component of business development in the modern legal services market. The market is “insanely-competitive” as Peter Brien of Slaughter in May in Hong Kong stated at the Inter-Pacific Bar Association Annual Meeting in Seoul a few weeks ago. Yet most law firms in the region take a cautious approach to social media as Deacons then Executive Partner Jeremy Lam outlined last year. While by no means the only measure of what law firms need to deploy to be successful in the new legal normal climate of competition among legal services providers – social media engagement is a barometer of how active a firm is in attempting to adapt.
Will local firms adapt to new competition?
Time will tell as to whether Hong Kong law firms will adapt to increased competition by disruptive new legal services business models. As Nicole Black outlined in MyCase blog last year: “Legal futurists like Richard Susskind and Mitch Kowalski have long predicted that value-based billing is the wave of the future for the legal profession–in part because corporate clients are beginning to demand it.”
We’re about to see whether Hong Kong’s long-term incumbent law firms will seek to compete with the new market entrants on the block and adopt flat fees for some work. The reticence about adoption of social media seems to reflect it might not.