I do think that the recession is showing that a certain models of legal services are less desirable as a business model that the others. This should now be clearer to many. But what I really have in mind when I say that legal services industry is in crisis is that many a legal product itself is by many clients seen as ever less desirable to acquire. At the same time it seems to me that many law services providers are not grasping it. This makes it serious.
The general user experience for the clients is so poor, even in many cases where a client might have prevailed, that they are simply trying not to get back for another round of such experience, unless they really have to or they are so big and so sophisticated users that they don’t really mind. This has very little to do with a standard of services rendered by a particular firm or an individual but has to do with the inherent characteristics of the legal system itself. Also, it is characteristic of most jurisdictions, regardless of how developed or efficient their local legal systems might be. The nature of legal systems, their inherent slowness, cumbersomeness due to complexity and the adversarial nature, unpredictability, expensiveness and slowness are just rendering them ever less compatible with frictionless economy the clients are doing business in.
I believe that if a service provider, such as us in the legal services industry, is selling a product (service) which is not seen as cool by its customers a modern market will certainly punish it. Locally, I have noticed, for instance, that many young creative individuals active in the field of music avoid using attorneys but instead try to protect their copyrights and trademarks themselves or with assistance of service providers that might be lawyers but are not members of the bar and do not try to appear to behave like lawyers at all.