Competition creates the value that the customer gets. There’s no substitute for it.
Take a look at this morning’s Wall Street Journal (subscription required):
“Charles Schwab, Fidelity Escalate Brokerage Price War”.
Featuring a picture’s-worth-a-thousand-words chart showing Schwab’s average commission per trade going from $12 in 2015 down to a little more than $7 — along with similar moves over the same time frame by TD Ameritrade and E*Trade.
Here’s the kicker:
“Schwab kicked off the latest round of price cuts with an announcement Tuesday morning that it would double the number of ETFs [exchange-traded funds] that can be bought and sold at no cost on its platform. Fidelity followed within the hour saying its platform would likewise expand its commission-free lineup to include more than 500 ETFs.”
“Fidelity followed within the hour.”
Not so the marketplace for lawyers’ services to companies.
I am not saying that you should pick lawyers based on price. Picking the “low cost provider” when choosing your company’s lawyers is dumb.
What I am saying:
A company should be able to expect that its outside lawyers will compete based on non-price terms of service that meet basic management disciplines that owners and managers require in every other part of the business — other than legal.