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Where is the Excitement about the Future of the Legal Market?

Every day I read about big and exciting changes in industry.  On Monday, the New York Times reported on the huge impact graphene could have in electronics and other industries, Forbes on the first artificial red blood cells that may go into production.

Change happens even in old line industries. For example, also in the Times Monday: Leaner and More Efficient, British Printers Push Forward in Digital Age.

You can read such articles regularly. Homes and appliances gain intelligence. Cars will drive themselves. We have new sources of energy. Medical devices will transform diabetes care. New categories of beverages explode in popularity.

Does the legal market offer the equivalent excitement? I don’t see it in the large law firm market. I do see it in legal tech start-ups (also today, see All rise: The era of legal startups is now in session in VentureBeat). 

The legal market could use even a small bit of such excitement. That would take R&D. And customers who appreciate changes that improve service and product. Legal tech start-ups in effect, are the R&D for our industry. But the results of R&D need an audience.

BTI reported last week that on average, only two law firms earn “primary status” at clients. Those two capture 40-50% of the client’s legal budget. How often do these clients switch firms because a competitor offers the proverbial better mousetrap?

If I’m right, a dearth of R&D and the stickiness of existing relationships provides little impetus for innovation and change. Please comment – tell me I’m wrong and why.

  1. Adam Ziegler

    Your point about the contrast between legal startup mania and the law firm doldrums is a great one. I’ve now lived and worked in both worlds, and I’m tremendously excited about the future. While lawyers are mostly sitting on the sidelines for now, I think lawyers should — and eventually will — seize this opportunity to remake the legal industry rather than cede it to people who know close to nothing about the world they’re so eager to upend. Instead of fear-mongering and snark-spewing, lawyers should be leading the charge, and in the right direction. We should be the ones building smart, responsible solutions to the undeniable problems around us. I’m optimistic that’s where we’ll end up.

  2. Catherine Bamford

    I was suprised to read this. Jordan is right, there is a lot of excitement about the changes to the legal market here in the UK.

    I am a legal knowledge engineer for a large firm and absolutely love my job, as do the rest of my team. We really are excited and inspired to be working in this field at a time when we are changing the traditional legal model forever.

    Clients are now asking firms to offer innovative solutions, alternative fee structures and greater efficiency in their requests for pitches. I’m sure the excitement in the US will ramp up very soon as clients catch on to the savings to be made to their legal spend and the better service clients in the UK are now getting from their panel firms.

  3. Catherine Alman MacDonagh

    Perhaps the excitement will emerge when we cease using the term non-lawyer and so-called alternative business structures (you know, law firms run like businesses by business people who might happen to be lawyers rather than the other way around) make their way to the US. It’s overdue.

  4. Jordan Furlong

    There’s no shortage of excitement in the British legal market — not a surprising result when the government explicitly places a consumer-first directive on the legal sector and lifts the lawyer monopoly on law firm ownership. When that kind of development reaches North America, I imagine we won’t lack for excitement either.

  5. John Kuttler

    Ron – The legal industry just isn’t sexy, like self-driving cars or graphene. It doesn’t capture the imagination. However, there are some exciting things happening. You can argue that IntApp is doing some innovative things and IntApp has acquired first DTE and now The Frayman Group, which could lead to further innovations. Not on the same scale as self-driving cars, however.

  6. michael simon

    Ron,

    I think you are on to something. But I also think you are not necessarily far ENOUGH onto to something.

    OK, now that I got that dramatic entrance out of the way, let me explain. . . Yes, law firms (with a very few exceptions) do not engage in R&D. But is that the root cause? I can’t be – the fact that law firms do not engage in R&D is not sui generis (I hope I use that correctly . . .) – there has to be some underlying cause for that, particularly since a very few actually do so.

    Yet, we know that cause. Indeed you have written extensively on this – and hence, maybe all I am doing is serving as your foil here (which is fine with me, as I’ve played worse roles in life). The current law firm structure, of a private partnership, along with the fact that so many at the top of the law firm hierarchy now naturally and understandably have short-term viewpoints, makes it pointless to expect long-term investments on a market-wide basis. The incentives for this sort of change simply are not there with the current structure and situation.

    Will it change? Yes. How will it change? Honestly, who can say? Change is inescapable – and some point it simply will happen to the big law firms too. Whether they are in front of that change or behind the curve (or crumbling under it) remains to be seen. I’m not Susskind (and I don’t even play him on TV) so I am going to leave that sort of big question to those like him.

    - Mike Simon
    Ronin and Co-Founder,
    Seventh Samurai
    eDiscovery Expert Consulting