Should We Settle for Incremental Change in Big Law?
Mainstream media regularly reports on big changes in many markets. Two juxtaposed articles on the front page (below) of the Business & Tech section of the Wall Street Journal (21 April 2016) got me thinking about change in Big Law.
The top-most article, “Market Shifts Slam Tech Old Guard“, describes the revenue challenges that EMC, IBM, and Intel and other established tech companies face because of the rise of cloud and mobile computing. Okay, you say, that’s the tech industry, we expect it to change rapidly.
So next consider the article below it, “Retailers Bolt Aging Mall for More Luxurious Digs“. It reports that major retailers now close stores in lesser malls and focus on fewer in just high-end ones. The transition reflects an over-malled US, shifting consumer tastes, and the rise of e-commerce.
And inside the section,”Flat Soda Consumption Hits Coke” reminds us of the decline of soda sales.
The conclusion? Changing tastes and tech affect most markets. The rate of change in large law firms and corporate law departments (Big Law), however, seems much slower than in tech, retailing, and beverages. Satisfaction with the status quo cannot explain this: in-house clients of law departments often avoid their lawyers and law departments regularly complain about large firms.
Big Law change may be slower but it is happening. Surveys, conference talks, and my own work suggest that law firm management now recognizes the need to change. That recognition has led to:
- New Types of Professionals. Many firms have hired pricing professionals, legal projects managers, and other professionals that did not exist a decade ago.
- Lower Cost Delivery Options. Large and prestigious firms offering lower cost service options. For example, both Paul Hastings and McDermott Will now have lower cost teams to service corporate transactions.
- New R&D Units. I recently assembled a list of large firms with R&D initiatives; doing so was impossible until recently.
- More Client Online Services. My list of these has multiple recent new entries.
- Frenzy Over Legal AI. A spate of articles about artificial intelligence (A) in the law and “robot lawyers” gives testament to interest in the topic.
We also have serious thinking about and advice for guiding change. My current favorite is Remaking Law Firms: Why and How by Dr. George Beaton and Dr. Imme Kaschner (published by the ABA). I am currently reading the book (March 2016) and regularly read updates to the Remaking Law Firms website. (Book review coming soon.)
The good news is that we see more real change than just a few years ago. But keep in mind two cautions.
First, don’t confuse the appearance of change with actual change, check-the-box solutions with real ones.. For example, some firms have pricing professionals but have done little to change how they deliver legal work. Without delivery changes, pricing folks can only move numbers around.
And second, beware of magic wands. A focus on AI can distract from more practical and immediately productive steps. For example, I had three unrelated conversations last week about document authoring tools (i.e., MS Word add-ins that help with formatting, numbering, and ensuring contract term consistency). That is one example of a mature yet under-penetrated productivity-enhancing class of software.
Change in Big Law takes hard work and investment. Don’t let promises of a dramatically different future (e.g., robot lawyers) distract from incremental improvements today. The former may take a long time, a major investment, and fail. The latter takes only blocking and tackling. It’s not easy, it’s not disruptive, and it’s not necessarily even marketing-worthy. But it’s sure to yield benefits soon.
This is not to ignore the case for dramatic change. Firms or law departments that manage genuine, deep change will gain many benefits. Smart organizations will at least run experiments on bigger changes while attending to incremental improvement.
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