Continuing with the end-of-year theme of predictions, commentator Adam Smith, Esq. recently asked a panel of fellow bloggers about the future of large law firms.
He posed the following question: “”Looking out five to ten years, what will the single most significant change be in terms of how sophisticated law firms (think AmLaw 200) are managed, on the ‘business side’?”
My answer:
“I started in the legal market in 1989 after three years as a Bain & Co strategy consultant. I observed glaring inefficiencies and convinced myself that the legal market would rapidly change in fundamental ways. I was wrong; change has been slow and evolutionary. Chastened, I no longer predict revolution. I think that the next 5 to 10 years will bring increasingly sophisticated financial analysis, particularly wide adoption of more detailed profitability and financial/competitive analysis. Firms will gain deeper insight into profits by practice, office, matter type, and perhaps even lawyer. Some firms may not act on their findings, but over time, the analysis will drive decisions from mergers to compensation to how matters are staffed. If true, this will not be as visible as other developments such as the advent of marketing departments, so observers will have to read the tea leaves closely to confirm this.”
Of course, enabling this profitability analysis will require some new technology, particularly business intelligence software.
For other interesting answers to the question, click here. Note that this is the first in a series of questions Adam Smith, Esq. will pose to his panel of “Savvy Bloggers.”