What will law firms look like in the future?
The rapid pace of technological evolution will affect society as a whole and will also potentially reshuffle the entire legal market. This will present challenges and opportunities and law firms will need to anticipate the future legal landscape to formulate a strategic plan.
The future of work in general is determined by the convergence of technological, demographical and cultural trends that challenge the traditional paradigm of work. To arrive at a logically sound conclusion about the future of law and law firms, we should carry out a thorough examination of the following questions:
- How evolving technology is reshaping the way we live and work?
- How will this rapidly evolving technology reshape the structural and cultural dynamics of organisations and law firms?
- What law firms will be like in the future?
Predicting the future of law firms
Predicting the future is hard. It’s a risky business and you are as likely to be right as you are wrong. Who could have predicted the massive technological innovations and disruption we have seen over the last 30 or 40 years?
Predicting the future of the legal services industry is particularly hard given that lawyers and legal industry leaders are risk averse by nature and they have always been defined by their conservative approach to, well, everything. Of course change is more often than not an unnerving prospect, particularly for the incumbents who always have more to lose than gain as they seldom anticipate the full force of disruptive change until it arrives at their door step. This has been the case with political, social and cultural changes in the past. In recent times the advent of large online retailers such as Amazon has sent incumbent high street brands such as House of Fraser, John Lewis and Toys R Us into retreat and in some cases into bankruptcy.
The legal services industry is currently undergoing a technological reformation and sadly, the incumbent lawyers and law firms are indifferent to this sweeping change. But for how long? The mood is best captured by Jordan Furlong, a prominent global legal analyst, who wrote in a recent in a recent article:
“I still see people in this industry asking, “Where’s the revolution? When is the change going to come?” Folks, the change is here. We’re living it. Cast your mind back five years, when Richard Susskind had just published The End Of Lawyers?, and ask if you thought this much upheaval and advancement and innovation was possible in such a short period.”
Indeed Professor Richard Susskind suggested, in one of his essays on the future of law, in the 1980s that it was possible that at some point in the future lawyers would communicate with clients via email. The Law Society at the time went as far as suggesting that he should be banned from public speaking as he was “bringing the legal profession into disrepute.”
Even though some in the legal industry thought that Professor Richard Susskind’s predictions were at least plausible, few would have anticipated a scenario where some lawyers, such as those belonging to virtual law firms, would conduct all client communications virtually. The exponential increase in computing power was predictable but the resulting device and its impact on human behaviour was not.
Fundamentally, we don’t know how human behaviour will be changed by technology in the future and we can’t predict how we will interact with it or the impact it will have on our society. It is difficult to predict which way the legal industry will head in the future, but there is a general consensus among lawyers and legal industry leaders that in the next 10 -20 years, the legal services industry as we know it will no longer exist.
Disruptive technologies impacting the business of law firms
There is no disputing the fact that we are living in an age where technology is the disruptive force that that sweeps the global business scene like an unstoppable avalanche sweeping every industry in its path. Gartner has said it believes mobile computing is forcing the biggest change to the way people live since the automobile. That’s not an understatement. There is no denying that the way we live and work has been completely changed by having internet at out fingertips, constant connectivity, instant communication and powerful computing devices. Mobile, social, networked computing has changed the way we work. We are now massively connected. It enables us to connect with people on the other side of the world in real-time and work from pretty much anywhere.
Think back twenty years ago when fast connectivity was the luxury of premium law firms. Now the smallest firm on the high street with a small client following has its entire operation brought to a halt the minute it loses connectivity.
Social technologies such as facebook, linkedin, twitter to name a few, has also had a significant impact on the way lawyers work. From a marketing perspective the social technology platforms represent a great opportunity for lawyers to profile themselves, capture leads and increase sales conversion. Enterprise social collaboration also breaks down organisational barriers, flattens hierarchies and allows connections between people that would otherwise be extremely unlikely.
Greater social and virtual connectivity creates the capacity for law firms of any size to choose from a global pool of talent as well as leveraging their multi lingual skills and global connections to acquire work from sources previously considered impossible. Greater connectivity and better virtual communication platforms also create the capacity for law firms to venture into foreign jurisdictions, without necessary reaching the economies of scale, by partnering with local law firms to serve clients worldwide. This also creates the capacity for smaller law firms to undertake complex, high-value cross-jurisdictional work that was traditionally the sole domain of a few of the largest or most prestigious firms
Networked specialist law firms: A new horizon for the legal industry
This landmark transformation is already taking shape in the legal industry. Different technology based platforms have attempted this model in different ways. The most notable example of networked lawyering is Lex Mundi Alliance. Lex Mundi is a network of law firms from over 100 countries with expertise in the gaming industry, allowing member firms to offer clients an integrated solution to their legal and regulatory needs across multiple jurisdictions. Lex Mundi member firms are top-tier law firms in their respective jurisdictions and among the most experienced.
They deliver indigenous insight, a market-specific focus and global connections to a diverse range of domestic and international clients. Each member firm is admitted only after substantial due diligence and must undergo regular quality and peer review procedures in order to retain membership in the exclusive Lex Mundi network. The key differentiators for Lex Mundi Alliance are their vast resources and their broad coverage. With 21,000 lawyers in more than 100 countries, it has the resources and the reach to compete with the most established players in the legal market. It means that in each of the world’s key business destinations, there’s a Lex Mundi member firm ready to assist. It is of course the case that the silver and magic circle law firms all have satellite offices in every commercial hub. But that’s exactly what sets Lex Mundi apart from the traditional market leaders. Lex Mundi member firms are top-tier law firms in their respective jurisdictions, and among the most experienced and knowledgeable in the world. They deliver indigenous insight, a market-specific focus, and global connections to a diverse range of domestic and international clients.
Being a Lex Mundi member firm means being ‘world ready,’ providing the insight, innovation, resources and cross-border connections to help the member firms’ clients meet the challenges of doing business in virtually any market, virtually anywhere in the world. So when a client of a member firm in one jurisdiction needs specialist lawyers in another jurisdiction, the Lex Mundi member firm there will know the courts, they’ll know the government agencies, they’ll know the business environment – they’re really tuned in to the local market.
In an increasingly networked world, this seems to me to be a model for the future; where smaller, more autonomous, more agile, specialist groups from all over the world come together to form a “super firm” when needed and then continue as specialist local firms when not.
For example, twenty four Lex Mundi member firms helped General Motors with Chevrolet’s exit from Europe. Lex Mundi was able to undertake this complex deal by enabling each of its 24 member firms to advise on the deal for their respective jurisdictions, with the overall effort being co-ordinated and led by Houthoff Buruma, Lex Mundi member firm for the Netherlands. So the client had a single point of contact and one bill but was able to leverage an entire network of specialist local firms.
Lex Mundi’s business model is agile, nimble, forward-looking, cost-effective and almost risk free. Contrast this with the fight to the death attitude among traditional big players who continue to believe that the only way to gain market leadership is by creating ‘super firms’ through mergers. More often than not mergers lead to cultural clashes between the mergers firms whilst the process of homogenising the two merging firms may not always be successful. It is quite possible that in the future more networked entities will emerge that will compete with one another as well as the traditional city firms. One thing is clear though: technological innovation will create new business models for law firms that will allow them to scale up in ways that were previously unimaginable and that in itself carries the biggest risk to the incumbent market leaders in the legal industry.
The law firm of the future
The law firm of the next 5 -15 years will look significantly different to the law firms of today. They will leverage technological innovation to automate standardised tasks and to augment what lawyers are capable of including creating the tools to augment lawyers’ reasoning abilities and negotiating skills. The narrative that lawyers will be replaced by robots in the future is largely misconceived. Lawyers will continue practising law but technology will play a huge role in how they practice law and as law firms begin to innovate to keep up with client demand and to find a competitive edge, they will consider new ways of operating that can encourage innovation. This shift will invariably force law firms to renounce the old fashioned top down, command and control method of doing business as it will be too slow to react and unable to make fast enough decisions.
The law firms of the future will create operational framework for innovation and will see innovation as the new platform for gaining a competitive edge or even surviving in an already super competitive market. The advancement of technology is causing businesses to go through one of the largest shifts since the Industrial Revolution. This digital transformation is forcing organisations to rethink everything about the way they do business. The firms and people that will be successful in this new era will embrace new ways of working, collaboration and teamwork.