BARGAINING POWER OF SUPPLIERS (LOW) – Unlike different industries, talent is considered as the supply for legal profession. In the most recent 3 years, the legal business has seen a growing surplus of talent prompting lower cost associates, staff, and contract lawyers, enabling more versatile firms’ greater opportunities to introduce alternative fee arrangements. This gives more prominent productivity and consistency for the client and profitability for the firm. In the interval, the competition for talent amongst lawyers with established books of business has never been stronger, prompting rising sidelong recruiting costs and increased risk corresponding to the portability of client relationships.

BARGAINING POWER OF CLIENTS (HIGH) – This is the field where greatest power is being utilized. While numerous in the industry will legitimately point to the expanded inclusion of procurement departments in the hiring of outside counsel, or just general price sensitivity. There are two under-the-radar changes, which have unleashed a notable transformation in the legal profession. To begin with, the increasing number of corporate legal departments which are not outsourcing large amounts of legal work to outside counsel, deciding instead to leverage the oversupply of legal talent in the market to staff their own departments in a much more cost efficient manner. For many firms, this can be a very uncomfortable situation, when the client is also the

competitor. Second, around 5 years back, numerous purchasers of legal services quit paying for research charges firms typically passed on to their clients, on top of hourly rates. For many firms, this change promptly brought about millions of dollars of added cost, making a sudden and intense impact on profitability.

THREAT OF NEW ENTRANTS (HIGH) – The third market power is the threat of new entrants, and this can be connected in various ways. For the last decade, innovation has been leveling the playing field between smaller firms and larger firms, creating an additional layer of competition that also distributes market forces to the rivalry amongst existing competitors. Smaller firms are posing a threat to larger firms largely because the perceived value derived from smaller firms is been seen as equal to, if not greater, than larger firms in the eyes of many buyers. In addition to that, the entrance of the non-lawyer owned firms also create competition over larger firms. The Legal services deregulation, enable non-lawyers like accountants to render financial services to people.

THREAT OF SUBSTITUTES (HIGH) – Similar to threat of new entrants, this market force keeps on applying expanding influence in the market. Legal Process Outsourcing (LPO) and the Legal Services Act are the essential drivers of this market force. More and more companies are utilizing LPO as a different option for developing their in-house staff and handling work internally, and also a distinct option for some legal work that has customarily been taken care of by outside counsel.

EXISTING COMPETITION (HIGH) – The final market drive, the center point from which the other market forces augment is still the most powerful for the legal profession, and that is the rivalry amongst existing competitors. While the blast in mergers over late years has eradicated some historic rivalries, the market forces discussed earlier, specifically the threat of new entrants, the war for lateral talent, and the bargaining powers of buyers, all provide additional complexity to the rivalry amongst existing

competitors. Firms continue to compete against each other for existing demand, creating commodity offerings with little differentiation, leading to increased buyer power. Unfortunately for the firms, as more legal work continues to be kept in-house or handled by LPO, the competition amongst firms will keep on heightening.