When you set up a home office, as I’ve recently been doing, you begin to notice lighting in a way you hadn’t before. It quickly becomes apparent that fixed overhead lights and large floor lamps, no matter how bright they might be, don’t illuminate desks and laptops very well. For close-range work, helping you navigate the nooks and crannies of keyboards and file folders, you need more focused lighting — portable, flexible, easily angled, with small super-bright halogen rather than rounded regular bulbs. These light sources are smaller and carry less wattage than the big lights and lamps — but they serve a specific need much better, and many of our illumination needs these days are pretty specific.
I used this analogy — high-wattage lamps that cast vast amounts of light in a wide circle, contrasted with smaller, sharper, focused sources that put only the light you need exactly where you need it — in a recent discussion about the future size of law firms. My theory is that most things being equal, the future belongs to smaller firms and solos, because the large-firm model ultimately suffers from an over-reliance on volume and an inability to finely focus resources.
Many big firms are like very large lamps with incredibly high-wattage bulbs that radiate huge amounts of heat and light — but in doing so, waste a lot of energy because they light up parts of the room that don’t need it and that aren’t going to produce a return on illumination investment, so to speak. Smaller firms, which do only a few things and do them in a very specific way, are like flexible halogen lights that aren’t for everyone and everything — but are ideal for certain contexts and needs. Mass broadcast power through reach and volume was the key to success in the 20th century, from media to manufacturing to marketing, and large law firms flourished in this environment. Their largeness was a competitive feature: volume as strategy, size as an end in itself.
In the 21st century, a different model will take hold. The future is fragmented, channeled, specific, focused, niched: a needle instead of a sledgehammer, a laser instead of a lamp. The elements of small practice — flexibility, dexterity, specialization, and personalized service — are ideally suited to the deeply diverse, long-tail legal marketplace that’s now emerging. A recent Economist article about the forthcoming U.S. census makes clear just how much is changing. The 2010 census is expected to reveal an unprecedented degree of diversity in the American population, a development of the utmost importance to marketers:
Cesar Conde, president of Univision Networks, a Spanish-language media company, says [the census] will be a “wake-up to marketers”. Once the results are in, firms are likely to invest more in marketing to minorities, to develop more products to appeal specifically to them, to advertise in languages other than English and to hire more racially diverse models. Peter Francese, a demographer at Ogilvy & Mather, an advertising agency, thinks the 2010 census will permanently change marketing. When companies analyse the census data, they will see that cities, and even some neighbourhoods, are so diverse now that broad advertising campaigns are no longer suitable. Mass-market advertising, he says, will become “extinct”. Marketers will instead have to focus on reaching specific households.
While the mass market continues to shrink and dry up, technology is simultaneously making the tiniest niche more accessible. Consider what Google CEO Eric Schmidt said about the future of his company: the goal is to give the user exactly one right answer to a query, not a list of possible right answers, essentially transforming Google from a search engine to a “find engine.” This technology already exists in the form of Wolfram Alpha, an “answer engine” that “computes and provides answers and relevant visualizations from a core knowledge base of curated, structured data.” These innovations should be widely available not much more than ten years from now, and at that point, how much good is size and volume going to do you, in terms of attracting customers and answering needs? People looking for legal help will find the one right answer or the one best answer, and all the size and marketing wattage in the world won’t help you be a better solution.
Starting now, law firms will have to justify their size. This is not only because the economic rationale for some law firm lawyers will cease to exist — traditional associates with too little work to pay their salaries, partners who fail to demonstrate their contribution in value terms, and the general decline of the leveraged pyramid model — but also because the advantages of size qua size are disappearing. Largeness does still have its virtues, starting with the fact that many big institutional clients need a law firm with multiple offices and a hefty workforce to mobilize on short notice. Big firms also offer “lawyer insurance” to clients: if my lawyer is away, five others can take my urgent call. And brand still counts for a lot, and will presumably count for even more in the age of the “answer engine,” when there’ll be a real advantage to circumventing the search process altogether.
But many of these virtues are gradually being counteracted by technological and cultural developments. Solos can collaborate with each other, through social networks and websites, as easily as a big-firm lawyer can walk down the hall and talk to a colleague — and can serve as backups for each other too. Small-firm lawyers can afford all the technological bells and whistles that big firms have long enjoyed, especially with the rise of SaaS and open-source technology. Small-firm lawyers can write blogs for next to nothing that, with the help of advanced SEO and link-building techniques, could outdo million-dollar big-firm marketing budgets in terms of getting the attention of the clients they want. With all these forces at play, a law firm that’s larger than it needs to be is going to run into problems.
Any biologist will tell you that the bigger an organism, the more energy and resources it needs to expend to keep going. Unless there’s a powerful competitive advantage to being big, smallness will begin to assert itself. Today, there are tiny desktop lamps that cast stronger light than the biggest, most florid 1970s table lamp, and even tinier lasers that put them both to shame in terms of power and accuracy. If you’re looking for a reliable model for law firms of the future, I’d recommend betting on the laser.