Just when lawyers thought it was safe, the Economist comes along to pronounce it’s not.
Laid-off lawyers, cast-off consultants (21 Jan 2010) reports on the impact of the economic crisis on lawyers and management consultants. The Economist writes that
“the legal profession seems likely to undergo the most profound structural changes. For the first time—long after IT and finance departments went through the same experience—the corporate legal departments that hire law firms are under great budgetary pressure, and are thus demanding much better value from them.”
One consequence of the shift according to the article is “a growing gap between the best firms and the rest.” Another is that “legal-process outsourcing is booming, as law firms parcel out some of their more basic work to reduce costs.”
On legal matters, lawyers argue a point until the Supreme Court rules on it. For economic matters, the market is the final arbiter. It does not debate whether to to grant a writ of certiorari; it simply does its job of selecting winners and losers. If I were a managing partner, I would listen to the Economist and assume the worst. If you wait until we know for sure, it likely will be too late.
Bad news for law firms could be good news for legal technology managers. The reality of the new market will require delivering more value. This could usher in a new chapter – maybe even a new volume – in legal technology. As firms get serious about process improvement, project management, and alternative fees, they will need to be creative in deploying new technology and using old technology more effectively.