What a difference a year makes. Pronouncements of the internet industry's death may be premature, but the reversal in the sector's fortunes could not be more stark. However, in the search for a new victim, much of the media is missing the point of what really has happened.

If net ventures got things wrong, they were not alone. Market forces of supply and demand have worked in a strange way – an endless supply of opportunities were greeted with an unending supply of cash. Value was being created in the travelling rather than the arriving and the perception of risk changed dramatically. The spirit of entrepreneurship was redefined, "business model", "killer ap" and "dotcom" entered the common language, and the dream of creating a net business venture became accessible to anyone with a good idea. Even magic circle firms were pitching for early stage business that normally would not have dreamed of being invited in. "Equifees" became a hot topic in law firms, a number of which publicly took the unheard of step of agreeing to take equity stakes in clients in lieu of cash fees.

The current climate means that companies cannot take for granted that an initial public offering or subsequent rounds of funding will just be there, or will be on the same terms and valuations enjoyed over the last 18 months. Investors are still prepared to put up money but less inclined to do so simply because the cash may be running out. The robustness of business models is being scrutinised to assess the likelihood of success in achieving market share, revenue and profit. A sharp distinction has been drawn between the net-based service businesses that have dominated the US and UK investment scene and driven prices up (and down), and the more traditional, albeit risky, business models of technology tool, service and product providers on which business and consumers (and the internet) depend. Company management needs to put to one side its sense of frustration that the goalposts have moved – all that has really changed is that investors expect to see a company delivering not just clicks but revenue and profitability within a realistic time horizon.

This new realism was both inevitable and foreseeable. What was surprising was the speed of change in the prospects for high-growth technology ventures. The same lawyers who funded such ventures are now turning their hands as corporate recovery specialists. In doing so, they have a unique role to play. The lawyers who have looked after the funding of companies can help the process of adaptation and change. They probably understand the business plans as well as management and investors. Moreover, lawyers are at the coalface when implementing instructions, and are in a position of maintaining a steady dialogue with clients that may be vulnerable to the shift in the investment climate. Clients should be encouraged to maintain a dialogue with stakeholders. Stakeholder dialogue in this context goes beyond the narrow group of employees, investors and lenders and includes suppliers, business partners and advisers. More than cash has gone into many ventures, and a lot of people in the wider universe have an interest in seeing success achieved and maintained.

So what difference can lawyers make? If they actively participate in the stakeholder dialogue, they can help to identify issues at an early stage when the need for change may not always be apparent to clients. After all, lawyers can look at the client's market not only through the eyes of the lawyer's business, but through the eyes of all their technology and investment clients. They can encourage companies to constantly reassess the venture's prospects and business plans and be better placed to help take remedial action before it is too late. Ventures that succeed will listen, embrace change and adapt quickly. The same, of course, applies to law firms.

David Mandell is a corporate partner at McGrigor Donald.