This is the third installment of a serialization of excerpts from the second edition of legal futurist Richard Susskind’s book Tomorrow’s Lawyers: An Introduction to Your Future. Read Roy Strom’s related piece here on how law firms are dealing with declining leverage.
From Susskind’s book:
The Future for Law Firms
One central question emerges from the first part of this book: to what extent can lawyers’ work be undertaken differently—more quickly, cheaply, and efficiently, but to a higher quality—using alternative methods of working? This is a key question of the day. As noted in Chapter 2, lawyers have for many years performed routine work for which they have been overqualified and for which, in turn, they have been overcharging. In boom times, in what was a sellers’ market, there was little need for successful law firms to be detained by the challenge of delivering services in new and more efficient ways. Today, however, as cost pressures from clients continue to intensify, as new service providers emerge, and as new technologies are deployed, it is unwise for any firm to avoid thinking about how it should work differently.
Nonetheless, I find that many traditional practices are not changing much. They are not yet adopting alternative methods of working. This is partly an issue of change management, in that law firms tend to be so busy serving clients and meeting their own financial targets that they allow little time for internal reform—it is not easy to change a wheel on a moving car. It is also, in part, a structural matter, because most law firms still aspire to the old textbook, broad-based pyramidic structure mentioned in Chapter 2, whereas alternative methods of sourcing call for a revision, if not rejection, of that model. And, if we are honest, there is also still reluctance amongst mainstream partners in many firms to believe that they really need to change. There is an inclination, in other words, to cling on to the old ways of working in the hope that there will soon be a solid economic recovery (from the downturn, Brexit, or whatever) and normal business can be resumed.
Prospects for Law Firms
However, if the analysis and predictions of Part One of this book are sound, then law firms in the coming decade and beyond will be driven relentlessly by their clients to reduce their costs. This is the heart of the more-for-less challenge (see Chapter 1). For most firms, despite their current hesitancy, I predict that this will lead eventually to the deployment and execution of alternative sourcing strategies (Chapter 4). And, in turn, we will witness the end of leverage—at best the pyramid (with partners at the top and less experienced lawyers at the base) will move from being broad-based to narrow-based. No longer will firms aspire to building large teams of junior lawyers as the basis of their profitability. ‘To survive’, in the memorable words of Theodore Levitt (in his seminal article, ‘Marketing Myopia’), lawyers ‘will have to plot the obsolescence of what now produces their livelihood’.
In due course, some firms may, for example, choose to strip away their junior and trainee lawyers, or stop recruiting them. They might then operate with a team of high-powered partners, each supported by, say, one associate; and the routine work will be resourced beyond the firm. Others may elect to build their own alternative sourcing capacities, such as internal teams of paralegals, or maybe through the establishment of their own off-shored legal facility. Still others will find opportunities for novel legal services (see Chapter 13), by creating markets that formerly did not exist or by inserting themselves in different places in legal supply chains (for example, by becoming involved far earlier in the life cycles of their clients’ business dealings).
Although these changes will impact on all firms (large and small), some larger firms will want to argue that, for ‘high-end work’, notions such as commoditization, decomposing, and multi-sourcing are of little relevance. But, on examination, it transpires that this concept of ‘high-end work’ is something of a myth—even in the world’s largest deals and disputes there are substantial components of work that can be routinized and sourced differently. And large firms that insist they only undertake bespoke work, which is a very different claim from asserting that they only do high-end work (bespoke being a subset, often small, of high-end), may find themselves at risk. They may be relegated, for instance, to the role of subcontractor to other organizations that step forward to undertake the project management of sizeable deals and disputes. At the same time, alternative providers may take up the work that these firms previously assigned to their junior lawyers.