What should the law firm of the future look like? With all the change underway, all the unmet needs of the market, and all the opportunities the market presents, what is the optimal model?
This is a commonly discussed topic in seminars, bar meetings, and academic settings. It should also be a central question in law firm management meetings and among in-house counsel as they consider which law firms to hire.
In a two-part post the Legal Executive Institute is publishing this week and next, Bruce MacEwen, responds to this question with a provocative suggestion: “Abandon the partnership model.” In his inimitable style, MacEwen asserts that the partnership model is a relic of the past from which law firms should liberate themselves. He colorfully details how the partnership model, in the context of large law firms, operates to:
- Undermine effective management decision-making;
- Elevate individual partner interests over institutional interests;
- Distort profitability measurement; and
- Impede investment in the future.
As on target as MacEwen’s observations are, most AmLaw 200 firms continue to flourish, notwithstanding the shortcomings of the partnership model. Thus, it is unlikely that we will see a rush to the offices of secretaries of state to file incorporation documents any time soon.
But MacEwen’s point is not really about the literal form of business organization. It is about the way law firms are managed and led, how their leaders think about the firms’ futures, and how the firms adapt to a changing world.
MacEwen challenges law firm leaders to free themselves from the tyranny of tradition—to think creatively about how things might be. Some of that thinking will be about partnership agreements or corporate by-laws; but the really important parts will be about policy and implementation.
Strong and successful as the AmLaw 200 are, they need progressively to adapt to the changing demands and opportunities of the market. To do that most effectively, they need to address the kinds of issues MacEwen raises. Firms won’t be able to meet the changing demands of the marketplace nor seize the opportunities the marketplace offers, without doing so.
So, once liberated, what should the law firm of the future look like? MacEwen’s posts suggest what the model should not be—but what should it be? More particularly, in what ways should the future law firm differ from the traditional model?
These are serious questions that all law firm leaders (and their clients) should be considering.
I believe there are five interrelated dimensions of the future law firm model that will be different:
- Service model
- Resource model
- Financial model
- Pricing model
- Investment model
In addition to considerations of practice, geography, and client management, the future law firm will focus on how it:
- Designs the work of each engagement;
- Assembles and deploys optimal resources for its service model;
- Achieves a sustainable level of true profitability;
- Prices services with greater transparency and predictability; and
- Sets aside adequate funds for investment in the future and manages return on those investments.
In my blog next week, I will examine these model elements in more detail.