The Great Legal Reformation (Live Post #ArkCM)
This is a live post from the Ark Law Firm Change Management Summit. This session is the keynote by Mitchell E. Kowalski M.A. LL.M. ICD.D., Barrister and Solicitor, Gowling WLG, Visiting Professor in Legal Innovation, University of Calgary Law School and Author of Avoiding Extinction: Reimagining Legal Services for the 21st Century. The session description is appended below.
Mitch will focus on the year 2030, 12 years out. Says this is at the far end of the planning range and not so close in time to be freaked out at. And it gives plenty of time for change management.
So how do we approach planning for 2030? Mitch reference the movie Fools Rush In. (RF: few in the audience, including me, know this flick.) The moral he draws from the movie is to focus on risk management.
Points out that firms are very good at internal risk management, eg, conflicts and ethics. But that firms are not focused on external risk management. Firms are too stuck on daily management and therefore often don’t see the external changes, opportunities, and threats.
Kodak never saw the move to digital media. Another company that missed the future was Blockbuster – Netflix killed the Blockbuster video start. The moral here is that consumer behavior did not change. The core behavior – take pictures, watch movies – was the same. The way they did changed dramatically.
Why is law different? Mitch asks his law school class on day one “What’s the purpose of law?”. Says it’s important to start with basics. Students come us with some good answers. But he never hears “the purpose of law is to give lawyers jobs”. When he points that out, the penny drops.
So if the purpose can be achieved without lawyers… what does that mean for lawyers? Clients will still need law but they will find other ways to get it.
Until recently: clients were not that price sensitive, clients perceived no alternatives, there were many lawyers willing to practice, and the tools to do work had not changed. But today, all of these prior pillars are in question:
Clients now are price sensitive and exhibit more aggressive buying behavior. Clients don’t complain about work or quality but they do complain about price and service delivery. In a private survey of UK GCs, Mitch found that 73% expected big changes in how they use law firms, mainly motivated by price.
Clients also intend to bring more work in-house. Points out the unexpected outcome that the customer can provide a service at lower cost on its own than the outsourced law firms can. This, he says, has given rise to alternative legal service providers and mentions the recent Elevate deal with Univar.
Millennials will be the biggest work cohort soon. This has implications for the legal market. They expect to change jobs frequently. Their average work tenure is 2 years. This has implications for law firm staffing models. References Daniel Pink book that finds that money is not the big motivator in creative / intellectual jobs. The drivers: autonomy, mastery, and purpose.
So millennials want the flexibility to work how they want to – and when + where too. They focus on right output, not specifics of how to get there. They also focus on purpose and impact – it’s not enough for them to focus on a small piece of work without seeing the big picture.
Millennials also don’t understand old ways of working. For example, it makes not sense for them to have to somewhere physical to sign documents. One study found they would rather give up sense of smell than their technology. But don’t assume they know how to use tech effectively. References D Casey Flaherty tech test / audit. Mitch says all his law students failed this test – and it’s basic MS Office and PDF tools. So millennials need training as much as anyone.
References Jason Browder, who created DoNotPay app that, at start, fought London parking tickets. His focus is making law free for the world. He is an outside, with a legal problem, who went outside the system to fix the problem. He’s a millennial. Next example is ROSS Intel – another example of outsiders coming in to fix problems.
Some firms, eg, Mishcon De Reya, have created incubators to bring legal tech into the system. Toronto has Legal Innovation Zone. Barclays Bank has just started a legal tech lab. Mitch says all this is accelerating.
So what is impact of the assessments above? We have a shifting landscape with clients changed, talent changed, tech changed, nature and place of work has changed. Mitch sees a resurgence of cottage industry approaches to solving legal problems. Another change: legal services as a team. There will be a team with thin layer of lawyers at top with much bigger teams of other professionals. This is “the end of scale”.
“Is Your Existing Business Structure Optimized for 2030?” Mitch suggests that most firms today are not.
The successful law firm of 2030 will emerge from the choices made by law firm leaders today. In order to create competitive advantage and deliver superior financial returns, law firms need to understand and adapt to the changing ecosystem in which they now live, as well as forecasting what that ecosystem will look like 10 or more years down the road; long term vision and strategy have therefore never been more important for law firms. Mitch Kowalski, examines the challenges law firms face now and in the future – then uses this perspective to suggest how these challenges will inform and reshape the legal service delivery model of 2030.
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