Editor’s note: Guest blogger Andrew McLennan-Murray is an applications integrator for Thomson Reuters, Legal.
Economic factors and evolving client culture have forced law firms to adapt their business strategies. At the ILTA 2010 session “A New View of the Automated Law Firm,” several experts gave their opinions on emerging law firm business models and the importance of process and technological automation to firms.
The panel consisted of Gerard Neiditsch, executive director of Business Integration and Technology from Mallesons Stephen Jaques; Jeffrey Rovner, managing director for Information for O’Melveny Myers LLP; Mary Abraham, counsel at Debevoise & Plimpton LLP; and Ron Friedmann, SVP in Consulting for Integreon.
Jeff Rovner referenced Richard Susskind’s The Evolution of Legal Service in a foreword, explaining how the business of law firms is changing drastically right now. Some firms, he said, would become the “Wal-Marts” of law, commoditizing their legal services and automating the legal workflow to peak efficiency; often competing on the basis of price. Other firms, he said, will become the “Neiman Marcus” of the law firm world, providing premium services and hiring only the most highly rated attorneys.
Gerard Neiditsch introduced the concept of the Law Firm “Stack” of the Future, explaining process categories firms will have to focus on for driving their business in the future. Key concepts included firm strategy discussion on “How Work is Produced,” “Who Does the Work,” and “How Work is Packaged.”
Carrying on the Wal-Mart and Neiman Marcus analogy, Friedmann went into specifics around how the “Factory” law firm of the future will approach creation of work product, and contrasted how a higher end service oriented firm might approach it. Friedmann took the example of document drafting and contrasted how commoditized “factory” firms might approach the task with how high-end firms would.
Document Drafting:
Drafting from Scratch – Very reduced in the “factory” law firm.
Drafting from External & Internal Samples – A strategy the high-end firm might utilize.
Drafting from Standardized Document – The bread and butter of the “factory.”
Drafting by Expert Systems – Highly utilized by the “law factory” firms.
Implementation technologies would vary between the two types of theoretical firms. For example, document assembly would be a critical tool for the law factory, whereas a tool to search external precedents would be more relevant for a high-end firm. Work product retrieval and DMS tools would remain important to both types of firm.
Critical to the success of the future law firm will be a continual focus on how work is managed. Budgets, project management, standard process documentation, experience location, formal lawyer training, enforcement of process, and strong client feedback loop will all need to be put under the microscope. The “law factory” will have to refine its project management, budget, and process methodology to be able to compete on price.
Firms will have to focus on how business is developed to stay relevant in the marketplace. Traditional methods of drumming up business like referral may continue to work well for the high-end firm, but the factory may need to take a different approach. For example, value of services per dollar spent will be a key driver for the factory firm’s business.
Firms may also have to change pricing strategies. The law factory will survive on fixed fee arrangements, retainer and subscriptions and contingency pricing whereas the high-end firms may still be able to stay with hourly rated or hourly capped pricing. Profits in the high-end firms will largely come from premium pricing and acceptance of high-risk matters. Factories will have to drive down their own costs through technology and high leverage practices to bolster their efficiency and throughput.
Overall the session gave a highly interesting hypothetical view into the future of law firm business. There was much debate during the Q&A period of the session.
The topic of the future landscape of the practice of law is sure to be hotly debated over the next few years, but only time will tell which predictions will come true and which will go the way of the flying car.
Andrew McLennan-Murray
Applications Integrator
Thomson Reuters, Legal
Posted by Andrew McLennan-Murray in:
In Business | Industry trends |
