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Law Factory Re-Visited and Staying Ahead of the Law Robots

If hotels can run multiple brands in a single location, can lawyers run multiple business lines in one firm? 

In 2011, I explained “law factory” and “bet the farm” firms by analogy to Hilton Hotels’ multiple brands, Hampton Inn being the factory, Ritz Carlton the bet the farm (see “Bet the Farm” Versus “Law Factory”: Which One Works? (co-authored with Toby Brown). I said that while Hilton clearly knew “how to operate properties at different price-value points”, law firms would “struggle to manage both bet-the-farm and law factory” under one roof

So I was fascinated to read Seeing Double on Check-In at Certain Hotels in the New York Times on Monday. It explains that Hilton and Marriott now build properties that house two brands. An industry consultant observes “The trend is intensifying as the cost of building and running hotels is becoming more expensive and growing as developers seek creative ways of building out real estate” and the article cites hotel executives who say that “the model allows them to provide more amenities than at individual hotels.” Each brand has a separate entrance and room configurations differ but the two brands share many services, which reduces costs and offers guests more amenities.

Perhaps law firms can learn even more from hotels than I thought. Maybe it is, after all, possible for law firms to run both types of business. So, just reserve that fancy entrance for clients with high stakes matters, the one with marble floors and free coffee, and usher in others via the service entrance and charge them for coffee.

Of course, one of the many limitations of BigLaw management is the belief that other industries offer few applicable lessons. Why look to successful companies in other industries when it is so easy to ask – and answer – what other law firms are doing?

If you, like me, believe that law factories have a bright future, whether housed in large law firms or, more likely, in new entities, then you need to think about what this means for lawyers. To help your thinking, I recommend you read A Strategy for Keeping the Robots at Bay (Wall Street Journal, 6 July 2o13, subs. required). The article states “Computers and robots will almost certainly make big inroads in professions like law, medicine, engineering and accountancy” (emphasis added). Note that it just assumes this will happen in law; I agree. It offers strategies to stay ahead of the robots.

Other industries evolve in new, interesting, and visible ways. Authors and commentators offer advice on how to stay ahead of the constant march of technology that replaces labor. Meanwhile, the big changes in BigLaw are lay-offs, mergers, and lateral hires. You tell me which approach is more likely to yield a bright future.