In his lecture, Triantis surveyed the reasons why major U.S. law firms have enjoyed robust growth in their transactional practices over the past several decades, including the fact that they have often provided their clients with substantial business guidance in addition to legal advice. But he warned that many of the services they’ve offered are increasingly provided by others—investment bankers, management consultants, accountants, offshore outsourcing firms, and other business professionals—more cheaply.

Triantis observed that transactional firms grew and rose to prominence by negotiating and drafting three kinds of contracts: “standardized” contracts that are easily adaptable for use by successive clients; “innovative” contracts; and “tailored” contracts uniquely geared to their clients’ particular circumstances. But increasingly, he said, law firms are losing market share to other players in all three categories.

To recapture lost market share and to stem the tide against further erosion, Triantis said, law firms should refocus on innovative contract design that does what other business professionals can’t do as well: anticipate and plan for what happens if and when a deal doesn’t work out—litigation.

“Litigation, in its various forms, is the core competency from which lawyers can derive comparative advantage in designing transactions for their clients,” said Triantis. “Lawyers can help their clients choose the mode of enforcement and mold their legal commitments accordingly, knowing that they will be enforced through or in the shadow of an adversarial judicial process. …The modern law firm is organized around practice groups. Two of these groups—litigation practice and corporate transactions—often fail to mesh at the interface of particular transactions because the firm that litigates a transaction is often not the firm that did the deal in the first instance. … By connecting these two services, rather than treating them as distinct tasks or modules, law firms can recapture some of the lost revenues.”

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