The basic economics of demand for legal services and supply of them

Economists would distill the corporate legal market into the DEMAND by corporations for legal services and the SUPPLY of those services.

Demand, what drives legal services, has been a topic returned to more than a few time on this blog (See my post of July 2, 2007: what drives a company to hire its first in-house lawyer; and Dec. 7, 2010: six primary drivers of total legal spending. Many topics reflect changes in demand for the advice of lawyers: global spread of business, regulatory requirements, complexity, intellectual property’s ascendance.

Supply, what meets the demand for legal services, has many forms. Foremost for organizations with a legal team of employees are inside lawyers followed by external counsel. Recently, LPOs have muscled in, along with educated clients who practice self-serve. Increasingly, online resources will be available to dispense legal guidance and documents (See my post of Oct. 31, 2005: online legal resources; Nov. 15, 2005: online resources; Jan. 10, 2006: lawyers and research online; Jan. 13, 2006: free online information; March 9, 2007: the price of legal information is being driven to zero; April 27, 2007: the internet and four generations of resources; Jan. 25, 2008: Martindale-Hubble and shared evaluations of law firms; Sept. 9, 2008: economics of information; and Jan. 11, 2010: Ning with 600+ IP blogs.).

Notions of supply and demand have shown up together on this blog in specific contexts (See my post of Feb. 1, 2006: auctions; March 20, 2008: in-house compensation; Sept. 22, 2008: social networks for lawyers, a metapost;; Nov. 17, 2008: without fungible sellers, legal economy violates standard economic assumptions; May 11, 2009: Say’s Law that supply creates its own demand; and April 29, 2010: no gap between supply of value by law firms and demand for it according to classical economists.).

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