More future thinking by Jordan Furlong of Law 21 ..
Well worth a read unless you are a partner at a firm who’d rather not know what’s around the corner
What if you could take a law firm, carve away all the parts of it you don?t like, and keep all the parts you did? What if, from the client perspective, you could get rid of high and rising prices, time-based bills, gratuitous overhead costs and unfamiliarity with your business? What if, from the lawyer perspective, you could do away with brutal billing targets, inflexible work schedules and long commutes into the downtown core? But what if in both cases, you could keep the high quality of talent and the brand-name assurance that comes with a respected legal services provider ? what would that be like?
It?s an intriguing question, but not because of whether it would be feasible ? it already is. Firms following this model are blossoming across North America and Europe. They offer corporate clients the services of lawyers with pedigreed credentials (large-firm and law-department experience) who will work from the client?s office or from home, for limited periods of time, at much lower rates than traditional law firms charge. The selling point for clients is the services of an excellent lawyer on the client?s terms, at a competitive price that excludes traditional firm overhead costs and revenue expectations; for lawyers, the challenge of high-end work on a short-term, flexible or even itinerant basis.
Maybe the best-known of this new breed of firms is Axiom Legal, which is closing in on the 300-lawyer mark, but there?s a growing collection of similar operations like Virtual Law Partners, FSB Corporate Counsel, Paragon Legal, Cognition LLP, Virtual Law [UK], The Rimon Law Group, and Keystone Law. They?re often called ?virtual firms,? but that?s a little confusing, in light of the growing number of small cloud-based law practices. I prefer VLP?s self-description, a ?distributed? law firm, or Keystone?s, ?dispersed.? Concerns about these firms usually focus on the scope of their expertise, their value for money, and their KM and quality-control systems, all reasonable worries.? There doesn?t seem to be much question, however, that these firms are sustainable and are already legitimate players in the marketplace.
No, what?s really intriguing about these firms is the fact that they developed at all ? that the traditional law firm has become sufficiently unpalatable to the people who retain it (and to some of the people who work inside it) that something new and different can flourish. Dispersed law firms directly challenge the traditional law firm model, presenting themselves as at least a complementary service to what traditional firms offer, and at most, a full-fledged alternative provider. These new firms question the fundamental nature of traditional firms, arguing that the physical concentration of legal talent in a high-priced centralized location with a rigid hierarchy and pyramidic revenue structure is outdated and self-serving. Flexible, project-based, techno-savvy, client-focused law firms are the way of the future, they contend: they?re more efficient, more accessible, and more rational.
So the battle lines have been drawn; which side you come down on may be influenced by how much you think physical proximity and legacy superstructure contribute to the expertise and collegiality of lawyers and to the power of the law firm brand. But is this the battle that will determine what ?the law firm of the future? will look like? I?m not inclined to think so. As I?ve said before, what we?re seeing emerge now are multiple potential models for law firms, any or all of which could prove sustainable; the distributed or dispersed law firm is a firm of the future, not the firm. And I tend to think that traditional and dispersed firms will come to resemble each other over the course of time anyway.
That?s why, for me, the most fascinating new entry in this area is an operation called Lawyers on Demand (LoD) ? it?s a dispersed law firm owned and operated by a traditional law firm. And it opens up a whole new conversation.
Lawyers on Demand is a service of UK law firm Berwin Leighton Paisner, and while both will undoubtedly be familiar to UK readers, LoD at least will be largely new to the North American legal marketplace. Lawyers on Demand bills itself as ?an alternative resourcing solution for in-house legal teams, providing talented and experienced interim lawyers to meet client needs ? a flexible pool of high-quality, freelance lawyers who are trained, vetted and supported by BLP and who work directly for clients.? Designed in part to attract good lawyers seeking more flexible work arrangements (it was launched during the height of the talent wars in 2007), LoD also very much resembles the dispersed law firms that compete with traditional firms like BLP. In fact, LoD?s co-founder describes it in part as ?a reaction to the growing trend for clients to move against firms? traditional hourly-rate charging format. ? [We] wanted to establish a pioneering program that would enable clients to receive legal advice at a fraction of the usual cost?.? That?s a remarkable thing for a traditional law firm to say out loud.
Lawyers on Demand is not to be taken lightly: it recently added Cisco to a client base that includes Dell, UBS and Gucci, and it led all comers in the Client Service category of the FT 50 Innovative Lawyers awards last year; in some respects, it?s the natural evolution of secondments. But it?s arresting to see a distributed law firm, every other instance of which is competing directly with traditional firms, owned and operated by one. It raises some fascinating questions.
For instance: what is the effective difference between a BLP lawyer and an LoD lawyer? Yes, the type of work they do is different ? LoD lawyers work on-site with the client for limited periods of time for a specific purpose, whereas a BLP lawyer stays in the firm and carries out traditional tasks pertaining to ongoing client files ? but that?s a difference in implementation, not in basic nature. Berwin Leighton takes pains to emphasize the high quality of LoD lawyers, which I?m sure is true, but if the quality and support are comparable and the LoD lawyer is considerably less expensive, where does that leave the BLP lawyer, competitively speaking? Would a client be inclined to favour the less costly and more flexible lawyer? Is there a risk that by operating a nigh-virtual and less encumbered version of its own firm, BLP effectively highlights for its clients some of the drawbacks of traditional law firms?
Or is that less a risk and more a strategic plan? What intrigues me is the idea that through the creation and operation of LoD, Berwin Leighton is both protecting itself against this new competitive threat and adopting some of that competitor?s advantages. It?s telling clients they don?t have to choose between the old-style firm and the new-style firm ? that they can have either or both, depending on their needs and circumstances at any given time. At this point in the evolution of the legal marketplace, when corporate clients are simultaneously pressured to reduce cost but also to maintain a sense of quality control, effectively offering clients two firms ? one traditional, one innovative ? could prove to be a remarkably powerful competitive advantage. Berwin Leighton is the first law firm to do this, to my knowledge ? I doubt it?ll be the last.
So maybe there?s no need to carve all the bad things out of a law firm, or abandon all the good things in order to start something brand new. Maybe you can put two ordinarily competitive models side by side in the same organization, let each complement the other while doing what it does best, and let clients pick and choose what they want from the resulting menu. Maybe the future isn?t ?lawyers on demand? so much as it is ?law firms on demand.?
