We conducted our 19th annual Law Firm Leaders Forum (the LFL Forum) last week in New York. As it has been from the beginning, it was wonderful event.
I founded the LFL Forum back in 1996 to provide a much-needed setting for law firm leaders to come together to talk about the most vexing issues they confronted. In many ways, 1996 was a very different time for the legal community from what we see today. What we now regard as BigLaw was just emerging. A new generation of leaders was taking charge, confronting a new set of issues in managing and leading much larger and more complex law firms. We all needed a place to talk frankly about what we were facing, and candor became the hallmark of the LFL Forum.
Over the years, as law firm management issues have matured and evolved, so has the LFL Forum. What has not changed, however, is its focus on concrete and nettlesome issues, by people who are actually confronting them, in a spirit of honest discussion.
This year’s LFL Forum focused on how the imperative for change is reshaping the way legal service is delivered and the implications of this for law firm leaders. The faculty consisted of a mix of law firm leaders, corporate counsel, new legal service providers, academics, advisors and journalists.
Here are some of the major takeaways:
BigLaw: Strong but Challenged—The market position of large law firms continues to be very strong, but clear structural and financial challenges are emerging. A group of 20 or so law firms are pulling away from the rest of the industry, with significant competitive advantages for that group, and disadvantages for the rest. Notwithstanding an increasing demand for legal service, aggregate revenue to the largest 200 firms is declining, particularly when adjusted for inflation, and especially in litigation matters. The market demand appears to be absorbed by new providers of legal service (“new entrants”), expanded corporate law departments, and smaller and regional law firms. A particularly interesting discussion of the financial trends for large law firms was provided by Aric Press, from The American Lawyer, who based his presentation on his recent article, “BigLaw’s Realtiy Check”.
New Tools and Methods Are Making a Difference—Material progress is underway in embracing technology and process management to improve the quality and efficiency of legal service delivery. Leaders from Novus Law, Ravel Law, and IBM’s Watson Project provided detailed expositions of the ways in which they have harnessed technology to deliver elements of legal service better, faster, and cheaper. Leaders from Seyfarth Shaw and Reed Smith described how their firms have modified their processes and business models to become more effective, while reducing their costs and enabling more transparent and predictable fee arrangements.
The prospect of technology to revolutionize legal service is becoming a reality. Prof. Daniel Katz of Michigan State University provided a true tour de force report on recent advances in technology in law. Ron Dolin, from the joint project of Stanford University’s law and design schools , reported on the way design concepts are helping incorporate technology into legal service.
Legal Education and Training: Reform Underway—The changes in the who and how of legal service obviously will change how we educate and train for careers in law. Law schools and law firms are responding. The deans of Georgetown and Ohio State shared how their law schools are taking stock of 21st Century careers and revamping the ways they prepare their students. The leaders of Goodwin Proctor and Alston & Bird shared how they have altered their talent models and revised their training programs.
The Direction Is Clear, Even if the Route is Not¬—All in all, the panelists expressed agreement that we are headed to a very different model for the delivery of legal service. The panelists also agreed that the specific path and pace of change is unpredictable. There are at least as many impediments as drivers. Progress will be uneven.
What is clear, however, is that those who do not heed the risks and opportunities that lie ahead, do so at their own peril.