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In light of a new report from ������Ƶ which assesses the competition posed by the Big Four to traditional law firms, how does the medium-sized market sector fare? According to Brad Blickstein, Co-head at Baretz+Brunelle, medium-sized law firms are generally more insulated from the rising competition compared to larger outfits, as a result of their ability to differentiate themselves: “If you’re doing business with a mid-size firm, there is a reason you are; it’s either because you like their cost profile better or the right attorney is there… The big law firms look like each other, but the mid-sized firms have already staked out some competitive differentiating ground.” This knack for differentiation in the medium-size sector is supported by a study we published last year, which found that medium-sized firms are far more likely to claim specialisation in a particular practice area (45%) compared to large firms (27%).

Going niche: a double edged sword

Although there are some distinct advantages for firms which decide to stake out a niche practice area, this can come at the expense of losing potential clients who fall outside the scope of services covered. Furthermore, specialisation does not confer immunity from the advance of the Big Four who are generally better placed to leverage technology and process-driven innovation to reduce costs and increase efficiency of more routine legal work. Bea Seravello, Brad’s Co-head at Baretz+Brunelle warns that the Big Four are liable to set their sights on specific areas and effectively wipe out the competition who are not prepared: “They could be looking at a swath of practices that are in the medium-sized playground and they could just focus on scooping that right up and taking it away from them … That is a possibility because they are much more of a machine; they’ll go wherever the greatest opportunity is for them.” So, whilst marking out their expertise in specific areas can pay dividends for medium-sized firms, there’s no guarantee that the advantage of going niche will fend off the competition in the long term.

Technology: staying ahead of the curve

Irrespective of their specialisation in a certain niche, it’s vital that all firms keep their eye on the ball when it comes to legal tech. Not only can efficiencies gained from harnessing new technology improve profits for law firms, but fast turnarounds for process-driven legal work are increasingly expected from clients, particularly in light of what the Big Four can offer. Commenting, Nick Smith, Acquisitions Director at Gateley, said: “From a technology standpoint, certainly in the mid-market, there is a heavy emphasis on service and a lot of what clients value is difficult to replicate with technology … But efficiency is key so as an operator the question you have to ask yourself is to what extent can I preserve the value my client sees our operations providing to them, but at the same time doing it in an increasingly efficient manner? That’s where technology can help.” Fortunately, our research indicates that medium-sized firms are ahead of their rivals when it comes to adopting technology and modern ways of working, with over 80% having adopted collaborative or remote working tools (compared to 77% of other firms) as well as knowledge management or sharing technologies (compared to 69% of other firms).

For more insights on how the Big Four are shaking up the legal sector, take a look at our full report:

Are the Big Four reshaping the future of legal services?