Big firms used to largely compete against other big firms. Since many big firms did things about the same, there wasn't much reason to innovate or focus on becoming "more competitive."
Big firms today are under the same competitive heat as every other business in every other market. The number of good paying clients is dwindling as large companies continue to fold and struggle. Many companies simply can't afford a $650 an hour attorney.
But there are lots of things big firms can do to become more competitive in order to attract new business and become more profitable.
I worked for some large firms, including Pepper, Hamilton & Sheetz, and Bowman and Brooke. Dick Bowman was one of the most innovative businessmen I've ever met, establishing a culture of lawyers and staff who are ravenous about working for the firm, offering alternative billing to clients such as General Motors back as far as 1990 and offering true leadership and vision, both internally and to the client base. I don't purport to be an expert on large firm management, but I am lucky enough to have seen both sides of the fence. There is no reason why many of the innovations being adopted by smaller firms can't be implemented by big as well.
Think value before hours: Even for firms billing by the hour, a mind set must exist which finds and rewards value at a higher level than the raw number of hours worked in a week, month or year. If attorneys get up in the morning to meet hourly minimums, they won't be thinking enough about their clients' concerns and ensuring there's an adequate return on investment for each legal dollar spent.
Think quality: Being competitive requires law firms to proactively find new ways to make sure they are doing quality work. Big firms have historically done a pretty good job turning out A+ motions and briefs. But quality means more than crossing all the T's and dotting all the I's. It means communicating that quality to the client so they understand the value the firm has provided.
Think efficiency: Speaking of A+ briefs, law firms need to think of the flip side of that coin. How much did that A+ brief cost? Was the last $5,000 of effort really worth the cost? Big firms need to become more efficient in providing high quality work product. In many instances, a B+ brief will provide more return on investment than the extra time it will take to make a brief perfect.
Think small: One of the advantages which big firms have is they are made up of many practice groups. Often times, big firms try to make every practice group comply with the same set of rules. Big firms need to start thinking about using these practice groups as incubators for ideas and new approaches. Partners in charge of practice groups need to be provided the discretion to create flat fee, define deliverable services, utilize innovative software, and rally their troops in new ways. Large firms can see what is working best in each practice group and adopt those into firm-wide policies.
Talk to their clients like business partners: One thing that smaller, more innovative firms do much better than law firms is talking to their clients about value, return on investment and business opportunities. Big firms need to become better partners with their clients and reflect that partnership in all conversations. Providing good business advise is often against the lawyer's interest in generating hours. Lawyers who develop strong relationships with their clients resulting in multiple projects and client satisfaction need to be incentivized as well.
I would be interested in your ideas as well. Feel free to take issue or add to my list.