The Changing Lawyer - All To Play For
by Litera Microsystems
Competition in the legal market is growing and shows no sign of becoming any less intense
There is a moment in the film Butch Cassidy and the Sundance Kid when the two heroes (played by Paul Newman and Robert Redford) are being chased by an avenging posse. However much the pair try, they can’t shake off their pursuers. In frustration, Butch turns to Sundance and exclaims: “Who are those guys?”
Law firm managing partners can perhaps empathize. The competition in the legal market appears equally as relentless and similarly fixed on its goals.
This situation was analyzed in the 2017 Report on the State of the Legal Market, produced by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Legal Executive Institute.
James W Jones, a senior fellow at Georgetown University and the report’s lead author, comments: “It has been a difficult ten years for law firms in many respects, and, looking ahead, significant long-term challenges remain.
“Actions that have helped sustain firm financial performance over the past few years, such as expense controls and reducing the equity partner ranks, are not likely to be as effective in the future.
Firms need to embrace a longer-term, fundamental shift in the way they think about their markets, their clients, their services and their futures.”
88% of law firms think that commoditized legal work will be a permanent trend going forward. Source: Altman Weil (2016)
One of those fundamental changes may well appear in the shape of the blockchain. Don Tapscott, author of Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World, describes this emerging technology in this way: “A vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value, money, whether that be titles, deeds, identities, even votes can be moved, stored, and managed securely and privately. Trust is established through mass collaboration and clever code rather than by powerful intermediaries like governments and banks.”
While the technology has so far made only a limited impact in the legal industry, lawyers could, for example, see blockchain-based decentralized autonomous organizations replacing traditional business structures.
On the one hand, blockchain contains the potential to render the traditional role of lawyer as trusted intermediary obsolete. At the other, it may offer new practice opportunities for blockchain-savvy lawyers.
Competition is also emerging on more established fronts. Until recently, clients may have looked no further than another law firm if they’d wanted to reallocate their business. Now their choice may stretch from small start-ups to global accounting firms. What was already a buyer’s market is becoming more so, with increasingly powerful in-house legal departments stoking up the market for alternative legal service providers (ALSPs).
The 2017 Report on the State of the Legal Market adds: “The potential impact of the Big Four accounting firms on the future market for law firm services cannot be overstated [for firms in jurisdictions where alternative business structures are permitted]. As the ALSP market evolves, the Big Four are likely to play an ever-expanding role.”
The rise of the freelancer
At the other end of the scale, but also likely to have an increasing impact, are freelance lawyers, such as those of the California-based Montage Legal Group.
Montage’s co-owner Erin Giglia explains the attraction of her business model: “We give smaller firms the ability to take on more work and more complex work than they previously were able to do— allowing them to ramp up in busy times.
“We are all former big-firm lawyers, so clients get the best trained people possible to work on their matter at the lowest possible price. Our rates are very competitive and those savings get passed on to the client.”
Originally published by Litera Microsystems 2017. To read the full publication click here. The Changing Lawyer document was created by Litera Microsystems and distributed in the Red Carpet Club - United Airlines over the 2017 Holidays. While it has no copyrights or publication information, all credit goes to Litera Microsystems .