Minnesota Lawyer, October 7, 2011
Lawyers have plied their trade for centuries, but change has never been faster than today for a profession where precedent and tradition have long been the rule. Part of that reflects the impact of a financial crisis and recession that still have not fully abated. But another major challenge comes from structural changes within the profession itself that the recession has intensified: globalization (a topic covered in a separate column), technology, cost pressure, aging demographics and more. These forces have combined to unleash trends that will be an inescapable part of the legal landscape for years to come. The firms that embrace these trends will survive and thrive; those that do not will face a bleak future.
- It's all about the client. To be client-centric is not new for successful lawyers and businesses in general, but this trend will receive greater attention from major law firms. The Association of Corporate Counsel's Value Challenge, with a scorecard that tracks how firms demonstrate understanding of the client's goals and objectives and use efficiency of management processes to achieve them, will be the kind of client thinking that is the new normal. As a result, more firms will likely start guaranteeing that clients will be satisfied working with its people and receiving its services — and will have to be prepared to back up such assertions.
- Leverage is not dead. Getting more work done by less expensive labor has always been a key element for economic success and lower legal costs for lawyers. Increasingly, however, clients will be demanding this leverage by seeking to direct how their matter is staffed, going back to the initial budget for the matter and using lower cost legal support wherever possible. Law firms can meet this trend by bringing to the table a formal checklist that defines exactly what is expected in terms of staffing, giving due regard for expertise, efficiency and cost and with individuals assigned and their billing designated up-front.
- Technology will be the key to doing more with less. If billing by time is to survive, using technology to do more, faster, will reduce revenue unless firms find a way to combine technology with leverage to do the work more efficiently and thus improve profitability. More important, being able to maintain billings while becoming more efficient depends on changing the billing system to embrace alternative fee arrangements (AFA). Using contingent, fixed, capped, value fee approaches where time is not the relevant issue to determine the fee will be the trend. As a result, the rules of professional conduct must be altered to permit billings without reference to time, particularly in determining appropriateness of fees where there is a dispute.
- The law will continue to be an aging profession. Demographic changes will compel more lawyers to consider that their practice has a value that can be transferred to someone else as they retire and sell what they have built rather than die in their boots. Lawyers will begin to consider a “second season” to their career as they begin to live longer lives but want to escape the stress of practice. As with the other trends, this is a positive — so long as you're prepared for it.
