The 1%, the 99% and the Future of the Legal Profession
BigLaw versus the Rest of Us
All the publicity given to the "Occupy [fill in the blank]" movement has popularized the notion of a 1% - 99% split in American life. The 1%, of course, constitutes the super-wealthy; the 99% constitutes "the rest of us." The comparison can be, and too often is, taken to extremes. But the fact is that it does increasingly apply to the legal profession. We inescapably are seeing the development of two separate worlds of law. There is "BigLaw," the megafirms with many hundreds and even thousands of lawyers, most of whom are representing global clients. And then, there are the rest. The other firms may have global clients and global issues, but the real focus is on small to mid-size businesses and individual issues.
Large Law Firms Petitioned the ABA Last Year
It has always been the basic premise of lawyers' self-regulation that all firms are equal before the 50 state bar associations. But last year a group of large national/international law firms petitioned the ABA with a complaint about state bar regulation, contending that, given their multistate and multinational corporate practices, such firms are restricted by the separate state bar admission requirements on issues like conflicts of interest, liability and lawyer mobility, and need special regulations to give them the flexibility of serving their unique client base.
The Future of Small Firms
If large firms get their way, what happens to the bulk of the profession, the more than 50% (some say as much as 80%) of sole practitioners who constitute small firms? These are the folks who provide most of the legal services. Corporate America is a small but disproportionately powerful group being serviced by BigLaw, a small, but disproportionately influential component of the Bar. The rest of the profession, however, is important and provides the bulk of the legal work for the other "99%." How can they survive in the two-tier world of the future?
Small Firms Can Compete
The fact is that there is a lot of work available for those who are flexible enough in their cost structures to be competitive. And that depends on the use of technology to become more efficient and improve the quality of their legal services, all at the same time lowering the legal costs to their clients. It is the overall legal cost, not the hourly rate, that the client cares about. And only technology can reduce the cost of operations and thereby allow firms to pass on to the client some or all of those savings. Collaboration in the context of providing greater value in legal services produces more effective representation at a lower cost to the client without discounting either the value or the per hour fee of the lawyer. Small law firms that can partner with their clients, and can show their clients how they can reduce their legal costs (without reducing the lawyers' per unit fees) will have a strategic advantage in the marketplace as true value-added service providers, no matter what two-tier structure emerges.
For those who would like to receive my new white paper on the "Future of the Legal Profession," send your request to edpoll@lawbiz.com and mention the white paper.
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