Market experts may disagree on what’s driving change in the legal market, but all would agree that there are some fundamental shifts underway that will shape the nature of the profession for years to come.
Supply side vs. demand side
Disruption has become a common theme in many markets outside law. The biggest taxi company (Uber) owns no taxis, the biggest hotel chain (Airbnb) owns no hotels, and the biggest movie rental store (Netflix) owns no stores. One by one, new software-enabled businesses are shattering the status quo. Will the law firm of the future have no lawyers?
Two recent articles in Legal IT Today (Issue #15) offer different perspectives on the changes unfolding in the legal market. In this post, we summarize the “buyer” and “seller” views expressed by the two authors, and the actions they suggest that all firms should be taking to prepare for the new world of law.
It’s a buyer’s market now
In Welcome to the buyer’s market in law1, legal market analyst Jordan Furlong suggests that too many lawyers “don’t appreciate fully that they are participants in a market”, and that power has shifted decidedly to the buyer. Buyers of legal services are more sophisticated, with access to more information about the law. They’ve professionalized their buying, and have more buying options from new competitors like accounting firms, software firms, and “flextime lawyer platforms”.
In this new world of law, Furlong asserts, sellers will need to compete on the basis of price, timeliness, accessibility, and relationships. Buyer value will determine successful transactions, not seller profit. He believes this transformation will be irreversible, but that lawyers still have time to make the necessary adjustments.
Furlong has several suggestions. Identify your ideal markets and clients, determine what they need, what you can provide, and how you provide it. In addition, develop a modern talent and operations base, that includes technologists, knowledge engineers, process experts, and salespeople; apply new technologies to increase speed and quality while lowering cost; and develop pricing that reflects the value of the service delivered.
Technology-enabled repeatable solutions
In The scalable lawyer2, Dutch lawyer Niek van de Pasch asserts that “technological innovations will reshape the legal market”. As a precursor, he argues, legal services must move from “singular events” to “scalable solutions”.
Van de Pasch envisions a world where lawyers, paralegals, clients and software co-operate closely, and project managers orchestrate “the bits and pieces of the process”. This approach will require transparent language to ensure that every player can participate fully. The result will be a demystification of the legal process that tips the scales in favor of clear-cut, repeatable solutions generating “previously unimaginable profits”.
Technology will play a role in this transformation, but to ask whether “robots will ever be able to think like lawyers is to ask the wrong question,” van de Pasch says. Instead, he says, ask which tasks computers can perform better than people and “which problems will always require professional judgment?” The answer may result in a reframing of the legal process, but there will always be a place for lawyers in the law firm of the future.
Not so divergent, after all
Although they describe the legal market from different perspectives, several common themes run through the writings of the two authors:
- The legal market is becoming democratized. Power is shifting to the buyer, as consumers of legal services become more sophisticated, and firms should be moving toward a more co-operative legal process.
- Firms need to manage their organizations like a business, developing new models of service delivery that maintain profitability while satisfying the growing client demand for value.
- New roles will emerge in the law firm of the 21st century, with project managers, knowledge engineers, and technology experts enabling more effective operational processes.
- Technology will play a key role as both a disruptor and enabler. New tech-enabled solutions will create greater efficiencies, aligning cost with value delivered, and freeing lawyers to focus on issues that require their unique professional skills.
So, whether you believe disruption in the legal market will be buyer-driven or seller-driven, it’s time to look at whether you have the people, processes and technologies that will help you adapt and thrive.
1 Furlong, Jordan. “Welcome to the buyer’s market in law.” Legal IT Today #15. September 2016.
2 Van de Pasch, Niek. “The scalable lawyer.” Legal IT Today #15. September 2016.