Rapid changes are tearing the legal industry apart
A while back I wrote an article about how the partnership model and its inherent handicaps made it almost impossible for law firms to adapt in the way they needed to. I was wrong. We’re now fielding far more inbound enquiries from firms eager to use LawVu as a client portal and adopt our client centric approach than we ever expected.
And we’re having pretty incredible discussions with their leadership teams. What’s obvious is that they’re not interested in playing pricing games. Discounting or blending hourly rates is not innovative. The changes being made to the way law firms package their offerings are designed to deliver true value to their clients. They’re bold, dramatic and happening very quickly, and they’re creating what may be an insurmountable advantage over their oblivious competitors that are still being run like they were 20 years ago.
In short – the industry has reached a real inflexion point and it’s creating a rift. One path is heading into an uncertain, but exciting future where the winners will take all the spoils, while the others will battle to survive off the scraps.
Simple. It’s leadership. The firms that are out in front are ones being lead by business minded CEOs (or some equivalent) with the support of forward-thinking partnerships who have made the decision to think about their firm in a different way.
The partnership model began as a mechanism for separate practitioners to share administrative expenses, and to a large extent, that mindset still exists in many partnerships. However, the firms that have changed are now seeing the partnership as an opportunity to pool resources and invest in building a legal machine.
For example, Dentons have spawned NextLaw labs as a way of leveraging partner liquidity to invest in legal tech (in particular ROSS – the A.I. legal research startup that’s beginning to gain real serious traction). It’s a brilliant way of hedging against threats to the status quo and it’s a model that’s catching on, with partnerships around the world trying their hand at venture capital. Closer to home, Corrs Chambers Westgarth have recently taken a 50% equity stake in the Australian operations of Canadian A.I contract review startup Beagle Inc.
“Our aim is to be at the forefront of these changes, to catalyse them. The key to ensuring we thrive in the shifting delivery of legal services is to ensure our innovations deliver value to the market. At times, this extends beyond our immediate client base, and our joint venture with Beagle is a great example of this,” – Corrs Partner and CEO, John Denton.
When you consider that both of these startups take direct aim at the current law firm model, namely leveraging low-cost lawyers to do monotonous work, you see how bold this approach really is. It’s a clear sign that the gloves are off and firms are breaking rank.With this new found freedom, CEO’s are making the kind of hires you’d see in silicon valley startups. Roles are being created where people have the time to ponder, the resources to execute and the mandate to see their vision realised.
A great example of this is Caroline Ferguson, Business Transformation Manager at Kiwi firm Simpson Grierson.
“I’m lucky to work at a really progressive firm. We spend a lot of time talking to clients to understand their changing needs. My role is all about helping to create solutions that enhance the client experience, through combining people, process and technology.”
Ultimately being chosen to help a person or company to solve their legal problems is a privilege, not a right, and firms that are focused on innovating in the right way realise this. They’re not just competing with each other, they’re now competing with an ever expanding plethora of technology-driven solutions that seek to bypass traditional law firms altogether. Existing relationships with a client base is a massive advantage over newcomers, but they need to be respected and nurtured. Clients want to see innovation that doesn’t just to help firms improve their profit margins, but improves outcomes for them.
Another example of this client led transformation is happening at Hamilton based firm Tompkins Wake, where they’ve adopted a philosophy of total transparency. Partner Peter Duncan says:
“Tompkins Wake is focused on evaluating and adopting technology that helps to ensure that we can deliver legal services that are relevant, timely, and accessible to our clients. We are seeking to encourage adoption of appropriate software solutions by our clients, often at our cost, to demonstrate our commitment to provide value and a fully transparent and integrated service.”
What’s obvious is that the firms that are adopting the philosophies above are quickly catching up to and surpassing the cliched ideas being dished out by “thought leaders” over the past few years. These firms are increasingly competing amongst themselves for the attention of sophisticated buyers. They’re forging their own paths and evolving into completely different entities to what they’ve left behind.
For the team at LawVu, it’s a fascinating and exciting time to be involved in such a dynamic and complex space.
LawVu is a cloud based legal collaboration tool that is helping power the evolution of the legal industry. Our technology sits between clients, and their legal service providers to help drive better outcomes for all parties. We have tailored modules for corporate legal teams and service providers.
If you want to learn more about how we’re powering the future of legal, then connect with us on LinkedIn or contact us at firstname.lastname@example.org
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