This is the fourth part of a series exploring the key players in the legal industry ecosystem and the pressure they are exerting and enduring. The author, Lucy Endel Bassli, was assistant general counsel at Microsoft and recently founded InnoLegal Services and serves as Chief Legal Strategist for LawGeex.
The most discussed player of the legal ecosystem is likely the law firm. In many cases, the law firm is attacked for its lack of innovation, antiquated practices and glacial pace of change. It is almost too easy to pick on law firms. After all, who can feel sorry for millionaire partners, with their high-rise downtown offices and wining & dining client relationship activities?
There is enough written about the disappointments of corporate legal departments in their law firms and the dissatisfaction with their services. I don’t believe in all of the complaining. Let’s examine just what the clients’ expectations are, those that the firms seem to be failing so significantly. I think there are two sides to every story — including that one. There is, however, another picture I’d like to paint about the very important role that law firms play in the ecosystem that is more than being a service provider to big corporations.
On the flip side, the law firms are the consumers of law school products: the graduating students. As we discussed in the last part of this series, law schools are beginning to modernize their curriculum and programs to teach lawyers additional skills beyond traditional issue-spotting and basic litigation practices. Where are these graduates finding jobs? If we set aside government work and legal aid jobs, the majority of those who go into legal practice are still ending up in law firms. If we look at the top students, the vast majority of them end up at the top law firms; those same firms that are the subject of so much criticism. So, what is missing? If law firms are bringing in recent graduates with new skills, shouldn’t the law firms be benefiting from those new skills and delighting their clients?
The reality is that the traditional business model of law firms, built on that dreadful billable hour, is often unwelcoming to practices that may reduce the total hours worked. The new skills that lawyers should be acquiring in law schools have precisely that possible effect, by assisting lawyers to be more efficient. Many law firms are beginning to see that they need to create new incentive models for their associates so that they don’t naturally beat the innovation out of the attorneys by rewarding only the billed hours. These are the firms that are targeting recruits from law schools with advanced programs in innovative practices as well as curriculum in business operations, finance, technology, and project management. Still, if supply is rising from the law schools, and demand is increasing from law firms seeking to hire these graduates, how is progress not more evident?
The reality is that the traditional business model of law firms, built on that dreadful billable hour, is often unwelcoming to practices that may reduce the total hours worked. The new skills that lawyers should be acquiring in law schools have precisely that possible effect, by assisting lawyers to be more efficient.
There is an internal tension within the firms. There is a sort of battle between those who “get it” and those who “don’t get it.” It is not so much even a generational issue, though there is something to that argument too. There is a natural change that will occur as the current body of senior partners retire and make way for the newer generations. Enough has already been written about the millennial workforce and how they will influence the legal industry to embrace technology and healthier work-life balance goals. Naturally change will occur as it always does when generations revolve. Perhaps this will be one of more impactful changes in recent times, as the gap between the exiting partners’ experience with technology is vastly differently from the experiences of the incoming generation.
Still, I think the tension is just as intense amongst those that “get it” and those that “don’t get it,” across roles, seniority, departments, and other variations. This tension exists in various combinations: (i) attorneys who get it and those who don’t; (ii) business professionals who are tasked with innovation and the partners who manage client relationships; (iii) technologists and partners who determine resource allocation; and (iv) practice groups more inclined to innovate their recurring work and those that claim to do only bespoke work.
Are these different perspectives validated in their thinking? Do people really not “get it” or are they just uninformed of the benefits and overwhelmed by the challenges? Why are some practice groups convinced that their work is so special that it could not possibly benefit from any of that “innovation stuff?”
It all comes down to awareness and education. Unlike in-house lawyers who are often working closely with other professionals from whom they can pick up an appreciation for other skills and capabilities (like solution architecture, project management, and financial analysis), law firm lawyers often practice inside their own bubble of expertise and only engage with the clients’ businesses from a distance. There is little opportunity for practicing lawyers to learn about these very important skills that now are becoming commonplace in modern legal practice. This lack of awareness coupled with the traditional business model restrictions is simply a recipe for failure.
There is an external perception that a law firm embraces innovation, yet the practicing attorneys often have little interaction with those innovators and actually don’t know how or when to engage them.
Another interesting development in law firms lately is the growing number of roles dedicated to innovation in one form or another. These innovation officers and partners face great challenges. The commonly known “secret” is that they are tasked with innovation yet are too often met with significant silent resistance. It is a paradox. They are specifically hired to implement change, yet when they try, they don’t seem to have great success at the pace that they would expect, given the high level of support they received during the recruiting process and the title they were bestowed.
This is perhaps the greatest internal tension in law firms today. There is an external perception that a law firm embraces innovation, yet the practicing attorneys often have little interaction with those innovators and actually don’t know how or when to engage them. This is similar to how many legal operations professionals experience their roles in-house (we’ll review that in a later installment).
The good news is that law firms are hiring these roles. They realize the need for these functions, and they are putting their money where their mouth is, at least to some extent, in taking this first step. But the rest of the firm’s lawyers seem to feel excused from innovating because there is someone down the hall with the word “innovation” in their title. I know from first-hand experience that law firm lawyers proudly parade their innovation “people” at pitches and client meetings, yet don’t really include them in the discussion of the engagement. It feels disingenuous to the client, but I think it all goes back to a lack of understanding and appreciation. The practicing lawyers just don’t appreciate what these innovation experts can do for their practice.
In short, law firms are actually trying, certainly at the macro level. They are investing in new and different roles. They are enhancing their marketing with new terminology; and they’re creating new lines of services for certain practice areas. There has not yet been a wholesale overhauling of firms (perhaps a few have really re-invented themselves), but it is good to see the various pieces of the puzzle appearing across the firms.
Each firm is approaching it their way, and no two firms look the same; but over time we can hope that the various puzzle pieces will fall in place within each of the firms. Then, perhaps this momentum will move the entire law firm community.
So, let’s give credit where credit is due. This is a very old profession, engrained in precedent and history. I am actually impressed with the hints of movements within law firms today. Those unique lawyers and law firm leaders who get it, just need more support to move the masses along with them.