NEW YORK — If one word could summarize the overarching themes from this year’s LegalWeek 2020, it would be “partnership.” But that word has many meanings.
More than ever before, the event’s speakers and panel sessions stressed not only the importance of partnership within the legal industry among corporate counsel, law firms, and technology providers, but also the scrutiny of the law firm model itself — in particular, the partnership track.
Starting with the opening session, Heather Nevitt, an editor with ALM Media, and James Willer, a senior analyst with ALM Legal Intelligence, examined the state of the legal industry, illustrating the significant rise of non-equity partners in the Am Law 200.
Last year, the share of non-equity partners at Am Law 200 firms was 44%, compared to just 17% two decades earlier. And almost half (46%) of the Am Law 200 increased the percentage of non-equity partners as a share of their overall partnership in 2019.
Interestingly, this development is having a positive impact on firm profits. Because fewer partners were being made equity partners, the total profit pool isn’t as spread around as much as it once was. Firms are more profitable because legal services demand is rising, of course, but also because firms are not having to pay more partners like equity partners, Nevitt and Willer suggested. (Notably, their research also showed a positive correlation between law firms with increased revenues and those firms with increased female partner growth.)
Nevitt also presented a general counsel “dream list” of law firm needs. Each list item — from being a proactive business partner to offering technology and innovative support for internal legal tech — drove home the idea that delivery of legal services in a tech-empowered world is more collaborative and less siloed than ever before. For corporate clients, an emerging delivery model is taking hold, and as Nevitt and Willer described, it’s one that values efficiency, price predictability, cost effectiveness, client service, technology, and innovation. It is also a multi-provider and encourages a proactive approach; and this model applies to both law firms and alternative service providers such as the Big Four accounting firms.
Legal services partners need to understand each other’s objectives and use solutions that provide valued service to clients while outpacing competitors.
Other sessions at Legalweek reflected this partnership embrace. In a panel on best practices for vendor management, Preston McGowan, chief transformation officer for Goldberg Segalla, stressed that legal services providers that ask how they can help solve client problems are more valuable that those that just inundate clients with a bunch of maybe-relevant metrics. Legal services partners need to understand each other’s objectives and use solutions that provide valued service to clients while outpacing competitors, McGowan said.
Chris Ende, chief value officer at Goulston & Storrs, agreed, saying effective data is data that is used to make relationships deeper. Although, he cautioned, when people make decisions off bad data or don’t understand the data, that’s not performing as a valued partner. Similarly, in another panel on data analytics, Jae Um, Baker McKenzie’s director of pricing strategy, encouraged investing as much in people-strategy as data-strategy; and Jason Barnwell, assistant general counsel at Microsoft, suggested that outside counsel should “walk toward tech more quickly” as an opportunity to differentiate the firm and ultimately demonstrate their value.
The message threaded through all these sessions was clear: Use all your available resources and partners, both human and technological, to clearly show your clients your value proposition.
To be fair, not every attendee nor exhibitor was evangelizing cooperation, and many of the panel topics reflected similar hot subjects from previous years: blockchain, data privacy, contract management, and rethinking the billable hour. Indeed, these are persistent problems that new technology alone won’t solve.
The endurance of these problems, however, is what drives home the need for partnership. As the industry continues to transform, the takeaways from events like Legalweek should encourage those in the legal sphere to partner up for their own advantage.