Future-proofing mid-sized law firms
A Guide for Strategic and Innovation Leaders
Published: 2021
Pages: 158
eBook: 9781787426191
Consultants who prowl the corridors of Midsize law firms have been offering gloomy advice for years. “Merge, grow, or die,” they say, as though there are only three alternatives for any business in this market that wishes to prepare for the future. The gloom has sharpened since the Great Recession. Some pundits are now predicting that by 2035—in roughly 15 years—more than half of the traditional law firms in the Midsize market will no longer exist. Despite such pronouncements, however, the Midsize segment had its best year in a decade in 2018. That one good year notwithstanding, many Midsize firms are feeling the pressure. While Big Law firms crow about their commitment to innovation, most Midsize firms are still trying to figure out where they fit in the new legal landscape that is taking shape. Some have embraced the “merge, grow, or die” dictum, and are busy trying to expand in some manner. Many others are still studying the problem and taking the first tentative steps—appointing committees, for example, or designating partners to lead their efforts. The key descriptor for much of this activity seems to be innovation—hence, we see the multiplication of innovation committees, innovation partners, innovation initiatives, etc.
We won't dwell on the changes in the legal market already amply covered in the legal press - flat demand, plummeting realization, pressure to price differently, etc. Instead, we'll explore the broader business climate and technological context in which all practice will operate in the future.
Our starting point will be to explore how profoundly dissatisfied our clients have become with traditional law firm service levels. As cordial as those clients may be over lunch or a round of golf, when truly pressed, most will admit to real frustration with how glacial the pace of change is inside law firms.
Next, we'll move to a technology focus. This concerns radical shifts in our society that will reshape how we do everything...including law. Technology already in the pipeline will cause breathtaking transformations in our business and personal lives, whether we innovate or not. Changes wrought by this technology will exceed our imagination's ability to foresee them, will exceed even the ability of our best futurists to predict what will happen.
We will then explore the competitive environment in which Midsize firms will be operating over the near and medium terms. Already, huge shifts in the economics of practice have taken place-largely driven by competitors from outside the traditional legal sector. In order to prepare to meet such emerging competition, you need to understand it.
Next, we will talk about the skill deficits you have to remedy to compete in an age that expects Amazons and Ubers. We can argue about whether law school training properly equips young lawyers for substantive law practice. But there can be no argument about whether young lawyers emerge into practice equipped to manage the business of law-even the basics of it. They clearly do not. And most lawyers leave themselves in that state throughout their careers. From there, we will explore particular skills in more depth.
In separate chapters, we will talk about:
+ Developing a baseline of service design skills using Design Thinking resources that are now available to lawyers,
+ Building a profit model and other business metrics capabilities that are essential as a means of measuring the efficacy of our innovation efforts,
+ Adding project management skills to firms to enhance our ability to manage both the everyday complexities of practice, as well as to carry off ambitious innovation initiatives,
+ Learning how to deconstruct and rebuild business processes so as to remove cost and add efficiency.
This is the area in which our clients are most interested in seeing us innovate. Maybe we should cultivate those skills. For all the gloomy predictions about rising competition and increasing price pressure that you'll find in the pages that follow, I hope you emerge from this study with a sense of optimism. I'm not the only student of this portion of the legal sector to see the opportunities in store for firms that seek to become change leaders.
Table of Contents
Cover | Cover | |
---|---|---|
Title page | i | |
Copyright page | ii | |
Contents | iii | |
Executive summary | ix | |
About the author | xvii | |
Selected publications | xix | |
An introduction to the future | 1 | |
Avoiding the ovine | 3 | |
Follow the nimble path | 4 | |
Here’s the plan | 5 | |
Cause for optimism | 8 | |
Section 1: A legal innovation primer | 11 | |
Chapter 1: Why innovate? | 13 | |
A piscine metaphor | 13 | |
Survival | 14 | |
But change how? | 16 | |
It’s not the technology | 17 | |
Killing the “merge, grow, or die” myth | 18 | |
Chapter 2: How the Information Revolution will destroy law’s economic model | 21 | |
Justifiable skepticism | 21 | |
Understand the exponent – understand the future | 22 | |
Rice and chess | 23 | |
Exponents in law | 26 | |
Chapter 3: Service is the real revolution | 31 | |
Faster | 33 | |
Better | 35 | |
Chapter 4: Client dissatisfaction is an engine of opportunity | 41 | |
More and more dissatisfied | 41 | |
Active unrest | 43 | |
Institutional versus individual dissatisfaction | 43 | |
Finding opportunity in the unwinding of the traditional law firm economic model | 44 | |
Chapter 5: Blockchain technology and the corporate self-help revolution | 47 | |
Mistaking the importance of blockchain | 47 | |
What is blockchain, anyway? | 48 | |
Why is blockchain important to lawyers? | 49 | |
Smart contracts | 49 | |
A lawyer end-around play | 51 | |
The blockchain bottom line | 51 | |
Chapter 6: Entrepreneurial firms will turn ELM systems to competitive advantage | 53 | |
Operations management for law | 53 | |
Powerful economics | 54 | |
The permanently tight belt | 55 | |
Chapter 7: What the competition looks like – ALSPs and other New Law entities | 57 | |
Law firms are losing increased law department spending | 57 | |
ALSP 24 percent growth | 58 | |
Chapter 8: Recognizing and overcoming internal barriers to innovation | 61 | |
Archipelago management | 62 | |
Cultural barriers | 63 | |
Defining entrepreneurship | 63 | |
Chapter 9: Structuring for innovation | 67 | |
Mining the seven sources | 67 | |
Chapter 10: Where AI fits in a future proofing strategy | 71 | |
The AI landscape | 71 | |
AI in law | 72 | |
The opportunity for law firms | 73 | |
Section 2: Six steps toward transforming legal service delivery | 77 | |
Chapter 11: Do client feedback like you mean it | 79 | |
Ride-share as a template | 79 | |
Formalizing feedback as a market strategy | 80 | |
Chapter 12: Bring Information Age business skills to your firm | 83 | |
A guild undone | 83 | |
Questions for a new age | 84 | |
Necessary and sufficient skills | 85 | |
Immelt’s Law | 86 | |
Adaptive skills | 88 | |
A framework of quantitative curiosity | 89 | |
Conditional reasoning | 91 | |
Statistical and probabilistic analysis | 92 | |
Filling the skills pipeline | 94 | |
Chapter 13: Become measurably better at business operations and client service | 97 | |
Testing your claim of superior service | 97 | |
Questions to ask as you begin to optimize internal KPIs | 98 | |
Measuring because we care | 105 | |
Can our documents help measure efficiency? | 106 | |
A real business case | 107 | |
How law departments might approach the problem | 108 | |
Problem finding | 108 | |
Chapter 14: Start doing process management with your own documents | 111 | |
Legal Process Management | 111 | |
The transient beauty of inefficiency | 112 | |
Document review as the bellwether | 113 | |
Powerful document assembly | 114 | |
Chapter 15: Make legal project management a discipline rather than an accident | 115 | |
Project complexity | 115 | |
What is Legal Project Management? | 116 | |
Why do LPM? | 117 | |
How to begin LPM at your firm | 117 | |
Chapter 16: Institutionalize service innovation in your practices | 119 | |
The ivory tower | 120 | |
Design Thinking. Really? | 122 | |
What is it? | 122 | |
Empathy? | 123 | |
An experimenter’s mindset | 125 | |
Putting Design Thinking into practice | 126 | |
Section 3: On the surprise consequences of innovation | 129 | |
Chapter 17: Transforming your service models transforms your firm too | 131 | |
Addendum: Additional practice innovation and service design resources | 135 |
JOHN ALBER
John Alber serves as Futurist for the International Legal Technology Association and for the Institute for the Future of Law Practice. He writes, speaks and consults on the need to reshape the delivery of legal services to suit a future demanding excellence far beyond substantive legal skills. John has served as a transportation industry CEO, as a practicing attorney and as a law firm leader.
During his 16 year tenure as Bryan Cave's Strategic Innovation Partner, that firm came to be recognized as one of the most innovative law firms in the world. While at Bryan Cave, he also served for 7 years on the firm's Operating Group (its management committee). At Bryan Cave, John created one of the first practice economics consulting groups, one of the first client facing software development groups, and one of the first in-firm legal process outsourcing (LPO) organizations. The groups he created developed innovative web-based, client-centric applications that delivered legal advice to clients, managed complex workflows and even created pleadings automatically. They also developed client-facing knowledge management, project management, project estimation and business intelligence systems and highly technology- leveraged alternative staffing solutions for engagements of all types.
John is an Emeritus fellow of the College of Law Practice Management. He has received a number of awards, both in the legal field and in information technology generally. Among other awards, he received ILTA's first ever Premiership Award, was named American Lawyer Media's first ever 'Champion of Technology', was given a Lifetime Achievement Award by Law Technology News and recognized as one of the 'Top 25 CTOs' in the world by Infoworld. In addition, while under his leadership, Bryan Cave received recognition as a CIO Magazine 'Top 100 Company' and was twice recognized as ILTA's Most Innovative Firm.