For all the diversity of voices, I think its’s fair to evaluate the conversation by saying agreement was asynchronously reached on a few key points, which – if they fall short of Google Maps turn by turn directions – are indelible indicators all of us would be wise to attend to.
- No one seriously believes or even suggests that global demand for high quality, high stakes legal counsel will collapse. Indeed, if history is any guide, it will continue to grow.
- And/but that does not necessarily imply that the only source of supply to meet that demand will always be lawyers in big, global law firms. They will continue to be part of the mix for a long time, but clients are less and less enamored of “what they sell, at the price they sell it, in the way they create and deliver it,” as Jordan Furlong put it.
- Clients are exercising their buying power.
- Clients are substantially growing their inhouse capacity.
- BigLaw firms that think it’s a comprehensive response to emulate the efficiencies of alternative delivery models, be it through labor market or occupancy market arbitrage, and through redesigning career paths to create ideally-infinite leverage, may just be postponing the day of reckoning or “fouling their own nests,” as George Beaton put it.Understand: Many firms may view this imitative flattery as a necessary response to the newcomers, but don’t delude yourself that it’s sufficient.
My view?
Count on clients to drive the vector (both pace and direction) of change, by voting with their wallets. and just as I prefer the coinage SophisticatedLaw to BigLaw, recognize for present purposes we’re talking about SophisticatedClients. (The Beaton dialogue touches glancingly, but no more, on the utterly distinct market for “High Street”/retail/consumer law.)
Nowadays, when I observe client behavior, I see two thoroughly opposed, but quite consistent, trends: A flight to quality and a flight to value. No single law firm can durably respond to both sets of client demand, which means many who aren’t already at one pole or the other will need to choose, and to change.
Excellent post as ever. The value vs quality trajectories point is interesting. I wonder about it. Gulatti and Scott’s Three and a half Minute Transaction book came to mind. Blue chip partners in blue chip firms not providing quality (post here http://lawyerwatch.wordpress.com/2013/09/29/securities-lawyers-and-sticky-contracts-innovation-and-elite-law/). A deepening of the gloom was provided by their observation that the sages on these firms, who actually understood the law they wrote, or rather had a better chance of understanding, were about too fall off he retirement cliff and were not being replaced.
Bruce, take it from a guy who is happy: You have hit the nail right on the head with your statement “To analogize to your own life, if your goal is to “be happy,” …..”
If more lawyers realized the wisdom of your point, things would go better for all of us, and our friends, families and clients. You would be doing us a service to expand on this thinking as a separate post, which I and many of your readers would enjoy reading.
The last point of your post is pretty pessimistic about BigLaw, but I guess “If they do not listen to Moses and the Prophets, they will not be convinced….”
Congratulations on a continuously interesting and fruitful website.
Paul Bannon, B.A., LL.B., LL.M.
Barrister & Solicitor
#360-33 City Centre Drive
Mississauga, Ontario L5B 2N5
(905) 272-3412
(905) 272-0142 fax
Paul@BannonLaw.ca
Bruce –
An unresolved question in the comments on the Beacon post was, “What do you do with the $XX million you raise via the BigLaw IPO?” In a way that is immaterial.
Your closing point – “If law firm leadership needs to alter the ship’s course, not everyone can get a vote. In fact, it shouldn’t be up for a vote.” – answers the question of why ownership structures need to change. As long as a strong, productive, but ultimately selfish and shortsighted, group of partners can block change, change will be blocked.
And, that is unsustainable over the long run for large, sophisticated businesses – legal or otherwise.
Are quality and value are necessarily separate? While I can see how they might be, there is really a lot of room for improvement in low-end tasks done in high-end law. And some of these quality improvements also make lawyers faster at their work, which, depending on pricing model, enhances value. A few quick examples:
– Ken Adams points to how nearly all firm lawyers draft by cut-&-paste as opposed to using document assembly software, which could help them provide more consistently high quality contracts in less time. Contract errors matter and are more likely with today’s slower cut-&-paste drafting.
– Ediscovery technology enhanced review software enables better quality litigation document review in less time. Better quality document review means the parties to the dispute have better evidence to work with.
– Our contract review software has been shown to help a lawyer do due diligence contract review with greater accuracy in 20–60% less time. Due diligence contract review takes up a lot of time in M&A deals; junior lawyers are slow and sometimes make mistakes in this work. These mistakes hurt clients.
There are a number of other examples where big firms currently underperform on quality, and could provide better work product in less time if they chose to.
l’m new to this site, so if this comment has been discussed in the past, I apologize. I wonder how much of the innovations and changes in BigLaw are really just “rearranging the deck chairs on the Titanic”. The reality is that there are just too many of these larger law firms. While there is no doubt in my mind that “BigLaw” will survive, there will not be nearly as many and their primary business will be large litigation matters or large financial deals. However, the latter will be in danger if the prohibition on non-lawyers owning law firms ever truly comes down (not in an investment structure manner, but in a true ownership – as in subsidiary – structure). At that point, I think the large accounting firms will acquire several of the larger firms and absorb them into their structure to handle large financial deals.
I think that a good exercise that I have yet to see anyone undertake is a comparison of what the legal industry is going through now compared to the accounting industry in the 70s, 80s and 90s. At that time, technology was making a huge impact on the accounting industry, firms of all sizes were consolidating, fee were dropping and fee structures were changing (introduction of the flat fee and project based model) and the industry was changing dramatically. There were winners and losers and today’s environment (big four, smaller number of midsized) was shaped by that tumultuous time. How can we learn from what happened to our accounting cousins and do better than they at managing the change?