Adjust, innovate, thrive.
These are the new mantras for a global legal profession in a state of flux and disruption.
Once upon a time the lawyer was the trusted family advisor, the revered fountain of knowledge, the master of interpreting arcane legal documents and complex case law, the litigation warrior. Now, the attorney’s role is transforming day by day and the environment in which we work is spinning around us.
From alternative fee arrangements and automated services to virtual offices and a perceived legal education crisis, change is the only constant for the legal industry and it’s fight or flight for law firms rushing to keep pace with the evolution.
So what are the key aspects of the changing legal landscape and what should law firms invest in to achieve longevity and success?
Change is ‘a Comin’
According to 2014 research conducted by the ALPMA and legal content and technology provider, LexisNexis Pacific, ‘Impact of the Changing Legal Landscape on Australasian Law Firms’, the global legal industry is undergoing irreversible transformation, with new business models, practices and processes becoming the norm.
The survey showed law firms had three top investment priorities:
- growth, and
- new ways of working.
And whilst we’ve started hearing the ‘disruption’ and ‘NewLaw’ message for some time now, what can we actually expect and how can lawyers thrive and prosper in the new environment?
ALPMA’s research suggests 97% of firms plan to invest in technology in the next 12 months.
It’s a positive result on ‘intention’ but what specific solutions are becoming more popular? With so many new tech developments and tools on offer, it’s difficult to know how to embrace the best solution for you and your firm.
Technology investments that pay off will likely include:
- updating your firm website (a 2015 MyCase study revealed 49% of lawyers, out of 800 surveyed, said their website revamp was a top priority)
- reviewing your legal practice management software, and considering a move to the cloud
- improving workflow, mobility and customer relationship management (CRM) systems
- moving to a paperless office
- blogging and marketing through social media, and
- investing in data security.
The new tech landscape has disrupted the legal profession just like other industries have been disrupted and as with any force of change, practitioners need to adapt and evolve to meet the market.
“As with any disruptive force, the tech revolution in law will negatively affect revenues and profits for existing incumbents, whilst nimble start-ups are likely to capture market share,” said Lachlan McKnight, CEO of Legal Vision, speaking with College of Law in July 2014.
“Simple legal tasks which many sole practitioners have derived much of their revenue from will become more and more commoditised. Law firms will either have to choose to provide high-volume commoditised services, or highly bespoke services. Law firms stuck in the middle will be in trouble.”
Gear Up For Growth
The legal services model has changed from a seller’s market to a buyer’s market so charging high prices or raising your rates in a tight economy will no longer fly with clients. Firms need to hold on to loyal clients and grow and evolve their businesses in a competitive global market. Shifting the firm’s growth strategy from a traditional marketing focus to one of creative business development and innovation could well be the best investment you make this year.
Steven Harper, regular contributor to the American Lawyer, Author of The Lawyer Bubble and adjunct Professor at Northwestern University, has noted that mid-sized firms “with a strategic focus will benefit as sophisticated corporate clients pursue greater cost-effectiveness in the delivery of legal services. Smart mid-sized firms will reap the rewards as many larger firms remain unresponsive to their clients’ persistent demands for change.”
And, according to Harper, small boutique firms “with a clear identity and vision will continue to enjoy the early stages of a renaissance. Their flexibility makes them nimble in ways that most large firms cannot achieve. Technology allows them to compete with their larger brethren.”
So the better and more innovative your growth strategy is, the easier you’ll ride the choppy waves of legal disruption.
New Ways of Working
Almost half of legal firms (47%) reported to ALPMA that they are ill-prepared to contend with the numerous changes in the legal landscape ranging from increased competition and price pressures to emerging technology, however with 39% of Managing Partners driving the change in working conditions, it’s clear that the leaders at the top are aware that we need to find new ways of working.
Pricing is one key area where new strategies are beginning to emerge. As corporate clients want to avoid hefty legal bills at all costs, new types of costing should also be a major focus for law firms however the ALPMA results tell a different story. Apparently, very few law firms feel the need to throw away the timesheets – in fact, only 18% of firms said they would focus on change in pricing strategy.
So while BigLaw Partners charge $1000 per hour and throw sushi, sake and business class travel costs on the client invoice, there’s an opportunity for small to medium players to offer fixed fees, AFAs and modest pricing to gain a competitive advantage.
Embracing mobility is also the ‘new black’ so make sure your firms are using tablets, smartphones and cloud-based tools in the most efficient way to meet client expectations, create workplace flexibility and improve firm culture.
And yet, in this shifting legal environment, there’s still a place for the trusted business adviser, the family consultant, the strategic mentor. There’s still room for the kind of legal advice you can’t get from an automated document, a standard template or a predictive coding system.
ConnectLaw owner, Fabian Horton, has told College of Law that while the role of the lawyer is undergoing a shift, he believes there are areas in which the services of a lawyer cannot be trumped by technology.
“Where technology is still a long way off is in the efficient application of legal knowledge directly to legal problems,” he said.
“To my mind this means that the lawyer is now seen (and operates) more as a risk manager – someone who knows the intricacies of the information and the processes, and from that level guides the client through the legal knowledge maze to an appropriate set of solutions.”
Flight? No way. Fight: Yes. Streamline your work with new tech tools, focus on growth and hone your strategic advisory skills and you’ll be the fighting warrior and confidante all clients want by their side.