The legal industry faces many challenges.

I think we all realise by now that things will not automatically go back to the way they were before the worldwide financial tsunami in 2008. The legal industry has undergone, and is undergoing, a fundamental transition and it is up to us if we want to be part of that change or not.

The question regularly comes up: can independent law firms stay independent? The global mega-firms continue to expand. Nothing new under the sun there. Historically those global firms have predominately been rooted in the Anglo-Saxon tradition. However, recently we have seen something new: global mergers between Chinese mega-firms and western firms.

China's King & Wood merged with Australia's Mallesons, and later added UK-based SJ Berwin to the mix. Dacheng is merging with Dentons to create the largest law firm in the world. There is no reason to think that this is the last such union, and there may be firms in other countries that want to be part of the truly global game – in India or Indonesia, for example.

The fall and rise of the accountancy firms

In the late 1990s the big accounting firms made inroads into the legal industry. I remember the concerns that this raised among law firms at the time. Many, including the global firms, feared that the accountants would effectively kill the legal industry as we knew it.

Now that, for various reasons, did not happen. The accounting firms clearly made mistakes and had to pull back or at least regroup. But now, some 15 years later,  they are returning. They have licked their wounds and learned their lesson. Obviously, we do not know where all this is going, but we do know that the accounting firms have unparalleled financial muscle and resources and could have any law firm for breakfast if they wanted to – so we had better take their challenge seriously.per-magnusson-magnusson

Coming back to my question: can we stay independent? Sure we can – there is no 'one size fits all'. The global mega-trends also create opportunities for something different. But if the independent firms just try to be global firms in a smaller format, there is really no point. We will be brutally beaten. If, however, we can capitalise on what makes us not a global firm, there is clearly a competitive edge. What this edge is, every independent firm must define for themselves.

And we need to be creative. Innovation is perhaps not the hallmark of a lawyer, but we all have different skills and we can bring on board people from other professions who are more creative than us. But we need to treat those other professionals, such as economists, IT people, marketing and communication people, as part of the core business, not merely as support staff.

The importance of technology

Take technology. Goldman Sachs is fundamentally an investment bank but it has recognised how instrumental technology is to its business. Now, technology is its largest division with 8,000 of its 32,000 employees. In 2014 six of Goldman Sachs' 78 new partners were software engineers. Why should it be different for law firms? Technology can produce many legal services in a more cost-efficient manner and with better quality than humans can, leaving lawyers to focus on high-end services. In the financial industry there is already a new type of profession, financial engineers, who have both an engineering and economics education. Law firms could benefit from having 'legal engineers'.

Then take fee quotes. We all struggle with our clients' questions about how much a piece of work is going to cost. But it is actually not all that difficult to give a pretty precise estimate or even a fixed price, even for sophisticated and complex services. Law firms have access to the relevant information because they have done numerous transactions or litigation cases before – they just do not have the information processed and readily available. With the right technology they could have.

Independent law firms could also be better at people management. We could make decisions more quickly and we could be more focused on what we are good at. We could be more flexible and adapt more easily.

So yes, there is a place for independent law firms in the future – and it could be a good place. To this end, the Legal Week Global Independent Law Firms Forum is an excellent opportunity to get inspired and exchange views and experiences, with a vision to enhance our own development towards an even brighter future.

Technology is all very well, but still nothing can replace the depth and nuances of face-to-face meetings.

The key to success

Here is some food for thought until we meet in London:

  • Implement a strong and effective management
  • Remember that it is not the big who beats the small, but the fast who beats the slow
  • Embrace technology
  • Watch out for commodity services
  • Embrace the skills of different professionals
  • Appoint some partners who are not lawyers
  • Make only new mistakes
  • Ring-fence talent
  • Remember that everything is not for everyone
  • Embrace ideas from everyone in the organisation
  • Let go of prestige
  • Hire people who are better than you are

Per Magnusson is a managing partner of Swedish firm Magnusson. Magnusson will be chairing the Legal Week Global Independent Law Firms Forum, which takes place in London on 25 March.

Legal Week Global Independent Law Firms Forum – how to book:

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 The future of independent law firms 2014 – online special

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