Tomorrow’s law firm, today

When I spoke at the Lexpo ’17 legal technology conference in Amsterdam earlier this year, I had the good fortune to finally meet Jacky Wetzels of Salesmoves (a Dutch consultancy specializing in business training, coaching, and strategy for lawyers and other professionals), with whom I had corresponded in the past. Our conversations led to an extensive interview about both my book, Law is A Buyer’s Market, and my thoughts on how lawyers and law firms can respond to the major shifts underway in the legal market. I’ve posted edited excerpts from my interview with Jacky below; you should read the full interview to get the longer version.

Never interrupt the compensation committee meeting.

Q. Could you share some of your ideas that come to mind when you think of the future of the law business?

A. Well, we’ll still have law firms in future. They’ll be strong professional businesses, they’ll give good service to their clients, and they’ll help the justice system work as well as it can. But most firms, 10 to 15 years down the road, won’t look much like they do today.

Whereas firms today generate 99%+ of their revenue from the real-time application of lawyers’ billed efforts, future firms will generate less revenue that way. “Non-lawyer” technicians, programmers, related professionals, and others will drive revenue in ways most firms don’t imagine today. The legal profession will have had to change its rules around fee-sharing with “non-lawyers” in order to attract and keep the best people in these areas, as a competitive necessity.

Ownership of these firms will change as well, from being 100%-lawyer to probably 50%+1 — maintaining putative lawyer control. This will affect almost everything we now assume to be immutable about firms, like compensation and promotion systems based on business generation and hourly billing. That will have knock-on effects in diversity, bringing more women into firms and especially their leadership ranks. Firms will be very purposely geared towards the interests of clients and the market, not to lawyers and partners as they are now. All of this will generate huge cultural changes.

Q. Let’s talk about the roles of leaders, lawyers and the other professionals in the law firm. Will it be lawyers using technology, or do you expect data scientists and other tech professionals to start taking over the jobs?  

A. Law firms, like most other successful enterprises, will be multi-dimensional. It’s not going to be just lawyers, supported by staff. It will be lawyers heavily supplemented by professionals and technicians from a broad range of industries and backgrounds. It will be not only lawyers’ services, but legal products made possible by the twinning of lawyers’ expertise and technicians’ know-how.

Yes, lawyers will absolutely use technology, but the nature of that usage will vary. Some lawyers will be deeply immersed in code as they create expert applications to answer commonly asked legal questions within financial institutions. Other lawyers will dip into predictive analytics before recommending whether to proceed with a litigation. It will depend on what makes sense for each practice area and market segment. Whether all these lawyers will do these things inside law firms, or on some superior platform, is an open question. But the more law firms resist change, the more these roles will leave firms and go to alternative platforms, or go directly to the client.

…but the best ship of all is “partner”-ship.

I’m really not sure whether lawyers will adapt well and start using new tools. But if we give lawyers new skills and attitudes, then yes, they can remain at the forefront of this market. I don’t see much interest by “non-lawyer” technicians in acquiring legal skills — they’ll recognize that the easiest way to access legal expertise is to ask a lawyer. In the future law firm, everyone will do their part, what they’re good at — division of labour. It works in every other industry, so I think it’s about time law gave it a shot.

Lawyers will have to choose our spots, figure out what we’re really good at that nobody else can do as well as we can. We won’t do everything in the future legal market — that seems absolutely certain to me. So the question is, what are we going to do?

Q. What skills do you think lawyers need to best cope with these challenges?

A. I’ve written about this in a few places now (here’s one), but I think we need to be equipping lawyers better in terms of collaboration, customer service, empathy, financial literacy, process improvement, and technological affinity, among other things. People sometimes deride many of these as “soft skills,” but I think that’s badly mistaken. Most of life is “soft skills.” The things that clients complain about most with their lawyers amount to soft-skill breakdowns — failure to listen, failure to empathize, failure to set expectations, failure to communicate.

If you talk to satisfied clients, both everyday individuals and corporate leaders, they’ll say the same thing: My lawyer listens to me, understands my situation, and responds to me in a way that makes me feel heard and recognized. You don’t need devastating intellectual power to provide that. Care about the person you’re speaking with. Stand in their place. See the world through their eyes. Commit an act of emotional imagination. It’s not nearly as hard as you think.

If there’s one thing we could use as a profession, it’s a strong dose of humility. We don’t have all the answers. We’re not the smartest people in the room. We’re not indispensable. We’re here to serve, not to be served. I would teach a whole law school class on humility if I could.

Q. What firms do you think will “survive” (stay profitable)?

A. I really think the difference-maker will be leadership. Not just the formal leadership of managing partners and practice group leaders, but the informal leadership of heavyweight rainmakers and political players inside a firm. Will a top-earning senior partner willingly and cheerfully divest himself or herself of 30% of their annual income, during the highest-earning final years of their career, in order to transition the firm to a new generation of leaders and ensure client continuity, or to invest in a powerful new technology platform that will generate massive revenue for the firm after the partner has retired? How many partners in your law firm would do that?

The hard reality is that very few partners would. It’s an unreasonable thing to ask. But leadership is about doing the unreasonable thing. It’s about taking a hit today so that others can enjoy some of your own good fortune later, long after you’re gone. It’s about stewardship and sacrifice for the next generation, paying into a fund that might never pay you back. The more people like that who are in your law firm, the better the chance that your firm will not just survive, but dominate, in the years to come. If you don’t have anyone like that in your firm, I suggest you start looking for your next position now.

Yes, these are photos from my Amsterdam trip.

Q. What can lawyers do in the meantime? 

A. Three practical steps. First of all, understand who and where you are. What is your unique value proposition to the market? Emphasis on “unique” — what have you got that no one else has, or that no one else does unquestionably as well as you? Collect intelligence on your market presence, or have someone do it for you. It’s no insult to say the category of their “unique value” is smaller than most lawyers think. If you don’t have the value proposition that you want, which one do you want? Then set yourself the task of establishing it.

Second, reach out to the markets and clients you want to serve and learn everything you can about who they are, what they experience, where they’re going, and what they need. What they need won’t always be what they tell you they need, by the way. Know your markets cold.

And third, start acquiring the skills and tools and expertise, wherever you can, as soon as you can, to present the unique value proposition you want to the markets you’ve researched and learned about and have committed to serve. That’s as good a start as any.

 

 



2 Comments

  1. Mike O'Horo

    Of all the things you mention, I’d argue that division of labor is the most important. Without it, lawyers will continue to be OK at a lot of things, excellent at none of them. The market has become intolerant of “OK.” Now, an integrated cadre of specialists produces the most timely and valuable output. Amateurs in any field, whether BD, client retention, market analysis, or any other discipline, will get crushed. For a long time now, lawyers generally, and partners particularly, have had too many jobs to do. During the benign decades leading to the Great Recession, being a reluctant and occasional amateur was survivable because client expectations were low relative to now. Now, it you’re not great at something, you have to stop doing it because you’re harming your firm and alienating your clients.

  2. Donna Kent

    Welcome to Tomorrow’s Law Firm, Today!

    Jordan perspective on the future of law is spot on, yet his views seemingly lack urgency. The change he outlines is here, today!
    Concepts discussed in this piece will become broader and ubiquitous with the law over time, but the consequence of waiting will force many to miss the boat. Jordan’s article ends on a crucial point that leaders are required for dynamic change. Leaders who do not fear to adopt new models. Survivors are those who understand change is here now and will not wait to drive change later. The legal buyer’s market today is underscored with dynamic social, economic, and technological disruption demanding collaborative leadership between lawyers and non-lawyers who give laser-like focus to the client needs. This new style collaboration is capably demonstrated by the Block Chain. Lawyers, engineers, and coders are working now to create smart contracts that define, track, and lockdown business transactions within a new world economy.

    Technology is the core of a global and digital economy which is evolving at warp speed. Agile legal technical platforms are critical to executing this work. NewLAW Technologies, a legal software company designing a new thinking law firm platform, is on the cusp of such a resource that will transact agreements with logical workflows, provide integration across firm roles, and enable deep collaborations among lawyers and businesses professionals to predict and mitigate business outcomes.

    Client focus is undeniable. Clients have eliminated billions of dollars of market share from traditional firms. Non-legal entities have proven to be strong contenders. Legal Zoom and Axion, once thought an anomaly continue to thrive. Online legal models are working. The Big Five accounting firms are absorbing legal entities to squeeze out reliance on the Global 50. Firms that have not embraced newlaw principles, will remain inefficient and unable to provide flexible fees and balanced structures. More pushback results by avoiding diversity which contradicts the modern buyer and will force a very steep climb on future roads if their change agenda is time lapsed. Compound this with emerging leap-frog technologies that require new thinking, new models, new partners which yields a legal provider without a future pathway. Others have quickly proved that law firm ownership will evolve and a new blend of business cleverness and legal minds will usurp the traditional partnership, culture, and economics. Thank you, Jordan, for leading us to the future. Let’s agree urgency is needed for survival. Compliance guarantees failure.


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