As I wrote three weeks ago, new tools and new methods make possible a bright new world in law. Achieving that world will require change in the way legal service is delivered. We know the market wants the benefit of that change. We know that new entrants are entering the market intent on making it happen.
We also know, however, that most of the market’s leading providers of legal service—the largest and most successful law firms, known collectively as “BigLaw”—have been slow to embrace the changes that need to be made. Much slower that I would have expected, and slower than I think they should be.
There are at least four reasons BigLaw should move faster.
- It Is Better for the Clients
The most successful law firms are committed to delivering the best possible service to their clients. This is an important part of what makes them successful. It is one of the reasons the best and the brightest lawyers join them and clients choose them.
There is little question incorporating new technology and process design will improve legal service. It will increase accuracy and reliability, draw on much more data, be faster, and be less expensive. All of this with no reduction to client benefit from the experience, judgment and talents of the lawyers.
- It Will Benefit the Firms and Their People
The new tools and methods generally address the more routine elements of the delivery of legal service. This is most obvious with tasks that are undertaken by a computer instead of a human, but is a much broader concept. Freeing up the most talented and experienced lawyers for the higher value legal work enables the firm to make the most of its resources, increase the opportunity for its lawyers to interact with clients, and generally operate at its most effective level.
It will also help firms meet the increasing fee pressure that nearly all are experiencing for nearly all engagements. The new tools and methods will drive cost down, enabling the firm to accept lower fees without necessarily reducing profits. Achieving this outcome will require changes to the firms’ business models, and will of course have some transition cost. If done effectively, however, these changes will improve firms’ bottom lines.
And, of course, firms’ lawyers will have more rewarding careers. Few people are motivated to do all that it takes to earn a law degree, pass the bar exam, and join a major law firm simply by the prospect of doing routine tasks. They are motivated and rewarded by work that is challenging and stimulating. If firms adopt tools and methods that liberate them from the routine, lawyers will have much more rewarding professional experiences. In turn, the firms will have an easier time attracting and retaining the top talent they need.
- Early Movers Will Derive Advantage
There are obvious advantages for the early movers in the change that is under way.
Clients are under enormous pressure to reduce all costs, including legal spend, while increasing the benefit they receive for what they do spend. This pressure is the most significant driver of the change that is underway in the market for legal service to corporate clients. The market is being redefined to require not only quality but true efficiency.
The leaders that are earliest to deliver their customary quality, in ways that are faster and cheaper, are the most likely to continue to be regarded as leaders in the new market. They will have the least pressure to rush their transitions, and the greatest opportunities to experiment with different approaches to find the ones that work best for them. In addition, the leadership they exhibit by early movement will inspire client confidence in the reliability of the changes they have made. Perhaps most important, they will be less vulnerable to erosion of market share to others who move faster.
- Waiting Too Long Will Be Calamitous
This change is underway, and it will not stop, nor abate. Financial reports on the industry already show significant price erosion, and related shifting in market positions. More firms are having serious financial problems. Adopting new tools and methods can be an antidote for the perils of the changing market, but being too late could be calamitous.
There are plenty of reasons for BigLaw not to be in a rush to change the way they deliver legal service. Not the least of them is the continuing high level of income they are able to share with their partners. But the warning signs are already apparent, and the advantages of expedition are clear. BigLaw needs to pick up the pace.
In future blogs, I will examine these points in greater depth, addressing further the specific considerations for the current market-leading law firms.