The Next Steps: What the Industry Needs to Do to Move Forward
The American Lawyer's editor-in-chief reflects on a week thinking about the big picture at the Legal Business Strategy conference.
March 02, 2020 at 12:45 PM
3 minute read
After spending several days in intense conversations with key stakeholders in the legal industry ecosystem at our Legal Business Strategy conference, the future of the delivery of legal services appears to come down to a few core themes and some important hurdles to overcome.
This is all based, of course, on the assumption that things do need to change—that, as some have said, the glacier is melting from below and even though the top looks solid, there will come a time when the foundation starts to melt away.
Law departments' needs are evolving. Yes, legal expertise from skilled lawyers will always be critical. But clients also want business guidance; tech access and support; benchmarking services and guidance in structuring their departments; data analytics to improve processes and outcomes; preventative law; and perhaps some matchmaking with other clients. This all adds up to sound a lot more like a consulting firm than a traditional law firm.
Even putting those "extras" aside, within traditional legal work, the concept of disaggregation is real, and happening in some counterintuitive ways. Axiom said it was recently hired by a large law firm to partner on a matter, at the direction of the client. Axiom's senior, on-demand lawyers handled the higher-end work, while the law firm sent its junior associates to work on smaller pieces of the matter and gain experience. Clients are buying services differently.
While clients are looking for a variety of service offerings, and a variety of prices within traditional offerings, one thing that became clear during our discussions was that they do not want to manage so many providers. They want their law firms to bring them prepackaged solutions.
Law firms have to get better at a few things: offering multidisciplinary services; collaborating with other providers; and the biggest challenge—figuring out a business model that allows them to do all this under one roof. The skill sets needed for legal service providers to effectively compete are evolving. And they can't all be charged out by the hour or at the same price and profitability model.
The legal service providers of the future may look a lot different in terms of the people they employ, how those people are charged out and who they work with. That, by extension, requires existing staffing levels to change, as well as pricing and compensation models.
There is significant change afoot in traditional law firms. It wouldn't be fair to suggest they aren't trying. But to make these changes and rely on the same workforce, pricing and comp models currently in place seems untenable to me.
There were more key takeaways from our Legal Business Strategy conference. Pay attention to deregulation of the law firm ownership rules in the United States—the Big Four certainly are. Pay attention to what law companies are doing and who they are partnering with. Focus on the skills needed for your attorneys and professionals to solve your clients' problems. Manage change from the bottom up, starting with small groups of evangelists. Find ways to invest in research and development. Think of your organization not just as a law firm, but a solutions provider. Does that change how it looks?
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