Pandemic IX: Law firm transformation

Someone asked me the other day my opinion on where the pandemic is taking the legal profession, given my status as a “legal futurist.” I’ve never much liked that term and have never used it to describe myself, so I was happy to reply, “You know, I think we’re done talking about ‘the future.’ There’s not much point anymore. The future’s here.”

SARS-CoV-2 has convulsed the world and created extreme uncertainty in every facet of our lives, such that there are few benefits of trying to predict, today, what the world will look like after the crisis ends. Predictions based on what data? Relying on how much evidence?

We can make educated guesses and we can map out various scenarios, and I don’t want to discourage those attempts. But we know less than 10% of what we’ll eventually know about this disease and its impact on humanity. We’re in a whiteout blizzard; we need to wait for the storm to ease a little before we can start to make out the unfamiliar terrain around us.

What I’ve instead striven to provide in this series is not so much prediction as prescription: Here’s what we can do right now to get through the initial onslaught of the storm, and here’s what we should do to start building better structures and systems to replace the ones that won’t make it through to the other side. I don’t think we should expect more of ourselves than that, at least until the outlines of our situation become clearer.

In today’s entry, the second-last in this series, I’m not even going to do much prescription, because been there, did that. I’ve spent much of the last 10 years recommending a new purpose and business model for law firms — as you might know, I wrote a book on the subject almost three years ago.Law is a Buyers Market - book cover thumbnail

So the first thing I’m doing today is making that book — Law Is A Buyer’s Market — essentially free for anyone who wants it. The hard-copy version is out of print, but you can download the PDF right here and distribute it as widely as you want. You can also still buy the Kindle version at Amazon, where I’ve reduced the price to US$2.99, the lowest Amazon will allow.

Secondly, I’m going to provide links to articles about law firm strategy and management that I’ve written in those intervening three years. You can consider these links to collectively constitute a de facto second edition of the book, or additional chapters that I would have included had they been written before the book was published.

    1. Clients. How can we prioritize our clients’ interests above all else? How to improve our law firm client experience and Is our law firm fulfilling its purpose?
    2. Service. How can we measure and improve our client service? A simple measurement of client value and As good as it gets?
    3. Business Model. How should we reconfigure the business of our firm? Rethinking law firm productivity measurement and Break the law firm business model
    4. Practice Groups. How do we manage our practice and industry groups? Law firms’ shopping mall problem
    5. Partners. How do I manage my powerful partners? Who really owns our law firm? and Don’t fear the rainmaker
    6. Associates. How should we rethink our associates and talent development? The revenue-neutral associate and Law firm culture and the “war for talent”
    7. Pricing. How should we price our services? The problem with value pricing and The rise of market pricing
    8. Compensation. How should we (not) compensate lawyers? How compensation plans are wrecking law firms
    9. Diversity. How do we completely change our approach to diversity? Law firms’ problem with women
    10. Technology. How should we incorporate AI into our firm? Getting over technology and Thinking differently about legal AI
    11. Innovation. How can I encourage more innovation in the firm? Faster horses and What will lawyers do now?
    12. Collaboration. How can I encourage more collaboration in the firm? The reality of collaboration and The price of collaboration
    13. Culture. How do we strengthen our law firm’s culture? Re-personalizing law firm culture
    14. Wellness. How can we ensure our lawyers’ wellness? Crushed and How to make less money
    15. Change Management. How can I lead change in my firm? Changing the lawyer assessment system and How to bring about change in law firms
    16. Future. How do we plan for our firm’s future? We’re here for a good time, not a long time and Fight the future
    17. The Big Picture. What does the really big picture look like for law firms? The cause of, and solution to and The new legal economy

And thirdly, in the balance of this post, I’m going to share with you my early thoughts about how this pandemic and its aftermath will eventually change the nature of law firms of all sizes, especially large full-service firms.

To be clear, this isn’t a prediction about the future of law firms — we don’t have nearly enough data yet. Nor is it a deeply detailed blueprint for the completely transformed law firm — I’m still working out what that might look like, and when I finally do, the result will probably be a major standalone article rather than a blog post. But I think I can delineate the outlines of one possible “future law firm” at this stage:

The thing about law firms is that they have always been home to two warring forces: the interests of the firm, and the interests of the firm’s individual partners. I wrote about this idea years ago here at Law21, and it constituted a cornerstone concept of Law Is A Buyer’s Market.

The interests of the firm include growing the business of the firm as a whole, building strong relationships with clients, amassing a powerful knowledge and data core, developing standalone lines of revenue independent from individual lawyers, and other goals consistent with making the firm as a business entity more capable, independent, and dominant in its chosen markets.

For the most part, the interests of individual partners run counter to these goals.

  • Whereas the firm wants to strengthen ties to key clients, so as to reduce the risk that the client might someday depart the firm along with their relationship partner, the partner wants the opposite: weak ties with the firm that virtually oblige the client to follow the partner wherever they might go.
  • Whereas the firm wants the partner to cross-sell the services of their colleagues in order to generate more business, the partner wants to avoid any risk that the cross-sold lawyer will disappoint the client (bad) or absolutely delight the client (maybe worse).
  • Whereas the firm wants consistency of retainers, communication, pricing, and billing, in order to maximize brand value, the partner wants complete autonomy to run their business the way they want, and to keep the firm brand from overshadowing their own.
  • Whereas the firm wants to grow overall revenue and profits, so that a rising tide will lift all boats, the partner doesn’t care all that much whether anyone else’s boat floats a little higher or lower, because the partner is concerned with only one vessel: their own.

You could think of these opposing forces as “centripetal,” or centralizing (the firm tries to strengthen the forces that pull key elements of the firm towards the centre), versus “centrifugal,” or decentralizing (the partners react against these efforts by asserting their own autonomy, keeping firm management within tight boundaries, and threatening to fly the coop if they don’t like how things are going).

Now, as you already know if you’ve worked in a law firm anytime during the last 30 years, individual partners have been winning the war against their firms so thoroughly that they look like the Harlem Globetrotters wiping the floor with the Washington Generals. Centrifugal > centripetal, and it hasn’t been close.

But the other premise of my book was that after countless years of ignominious defeats, the law firm as an entity was mounting a comeback. Driven by factors such as dedicated and professional leadership, the unstoppable rise of technology, and the growing power of a dominant and differentiated brand, firm managers and leaders were starting to assert more control over individual partners and enabling their firms to act more institutionally than they ever had.

And there was reason to think that the comeback was accelerating. As firms set up more subsidiaries, created more R&D functionalities, and brought in more technology-powered client-facing sources of revenue that they controlled and directed centrally, rather than being dependent on individual partners, the firm’s power base would grow and those centripetal forces would become stronger.

That was the theory, at least — a pretty good one, if you ask me. And I still think that for many types of legal service providers, that’s the model that will eventually win out. But the pandemic has exploded onto this battlefield, and in the initial stages at least, it is lending its strength to the centrifugal, decentralizing forces within law firms.

Consider some of the early impacts and likely knock-on effects of the pandemic:

  • At the most basic level, physical distancing requires everybody in the firm to stay away from each other, working from home and connecting only by audio and video, thereby weakening the ties that everyday physical proximity help to bind.
  • As lawyers work from home, carry out tasks, and docket their time, it becomes ever clearer to both the lawyers and the firm that billable legal work can be carried out without the firm’s active presence or involvement. Lawyers are busy; the firm is dark.
  • In a crisis situation, decisions frequently have to be made on the spot with limited consultation opportunities. Lawyers really don’t like this, but they’re doing it — and as they do it successfully, their sense of autonomy and independence grows stronger.
  • Firms are unlikely to press their lawyers to maximize billings during a pandemic, reducing the relentless pressure most lawyers experience. Lawyers will see that this and other supposedly “impossible” changes turned out to be possible after all, and they will remember it.
  • As physical distancing relaxes or becomes less frequent as the pandemic slowly runs its painful course, a certain percentage of partners are not going to return to their offices — they’ll have made alternative arrangements that they prefer, and they will not be told when and where to go to work.
  • Other lawyers and staff will follow these partners’ lead, and firms will increasingly find themselves with vacant offices in expensive high-rises. In an effort to cut their losses, they will downsize their physical footprint or convert unused offices and cubicles into high-tech conference spaces.
  • Satellite offices in suburban parts of the city will soon start to spring up, where partners in a practice or industry group gather their associates and support staff. These groups had long been firms’ true power centres, and physical independence will strengthen them further.
  • Law firm headquarters will become home to senior management, a few aging traditionalists, and client meeting areas. In an effort to maintain presence and relevance, these HQs will also host training academies for new hires and fully staffed R&D divisions to develop new client-facing products.
  • Within three short years of the pandemic’s arrival, then, law firms could change from highly centralized collections of disparate lawyers sharing a common space and culture to hub-and-spoke arrays of high-powered legal experts held together by a valuable brand and not much else.

Again, this is just one possible path forward among many, and I want to keep these possibilities deliberately vague at this stage, because the absence of meaningful data about our current situation and immediate future renders any attempt at prediction little more than speculation.

But any one of these paths forward could spawn multiple second- and third-order effects. There’s no obvious reason, for instance, why one of these satellite offices could not be embedded onsite with a major client, or why any law firm so decentralized should bother maintaining the traditional full suite of service areas with widely varying client types and profitability levels. And what about multi-disciplinary workforces? What about non-lawyer ownership? Both of these innovations are much nearer today than they were just two short months ago.

So I invite you to use the foregoing thought exercise to consider how this pandemic — a shattering force of chaos, anxiety, dissension, fragmentation, and isolation — is likely to forever alter the trajectory of law firm transformation. Which existing virtues of law firms will the pandemic undermine? Which elements of discord will it aggravate? Or, if you prefer to approach the question more optimistically, which positive aspects will it encourage and which negative tendencies will it ameliorate?

Or — and we have to consider the possibility — will the impact of the worst worldwide health emergency in more than 100 years, coupled with a potentially Depression-scale economic contraction on a dangerously interdependent planet, simply blow “the law firm model” to pieces? And if so, what do we do next?

I don’t have answers to any of these questions yet — I’m still trying to work out the right questions to ask. My book, the foregoing links, and these last three posts are the best advice I can currently give to law firms about their eventual future state.

But I remain confident that if we can keep our core principles about the professional business of legal service, the well-being of our colleagues and employees, and the interests of our clients firmly and foremost in mind throughout this ordeal, we’ll do okay. Maybe a whole lot better than okay, in fact.

And one last piece of advice: Stay connected with each other. This pandemic, like I said, is a shattering force of dissension, and it aims to both literally and figuratively drive us apart from each other, to divide us and isolate us. In that regard, it has plenty of allies, especially in certain governments.

Whatever the merits of centrifugal force in law firms might be, I urge you to resist its rupturing and fragmenting effect in your communities and in our society. We are better together, stronger together, and strange as it might seem, healthier together. No one individual can stop COVID-19. But one whole planet can — and will.



5 Comments

  1. Simon Tupman

    Great post, thank you Jordan. So many helpful thoughts here for those looking to build a better future. I am optimistic about what lies ahead and believe this cloud has a silver lining.

  2. John Omoruan

    This is a great contribution to the profession of law. Well done!


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