LEGAL
I live in the Washington, D.C. area; I'm writing this in spring, when the entire region is all about the cherry blossoms. Visitors from around the world come to view the ethereal allure of our cherry trees and other spring foliage – it's breathtaking. Part of the magic is that even though we know that the trees will bud again each spring, there is something almost primitive – beyond the spectacle of color and nature – about celebrating the end of winter, and witnessing the rebirth that these amazing spring blossoms signify.
This annual cycle of birth, maturity, decline and rebirth got me thinking about the legal profession and the changes it's cycling through, as well.
Because of my work as a bar leader, I can point to a large number of very specific instances that many constituents would point to as indicators of a very mature profession that was increasingly showing signs of decline:
Even as the corporate practice marketplace continues to buzz with business, the corporate lawyers your company works with are bleak about the prospects for the future of legal practice ... many mourn for "the good old days," and few seem interested in changing anything, even as most agree that what they're nostalgic for is broken or is unlikely to offer a successful path forward.
Warren Buffet once said that it's hard to convince a bunch of millionaires they're doing something wrong. And as successful as our profession is, and as highly expert as our top inside and outside counsel practitioners are, the legal profession feels to many like it's dying, or at least stuck on a doomed course – on a downward spiral of greed, dissatisfaction, lost principles, and disconnection from the clients it purports to serve.
One might say that now is the winter of our discontent.
While it's possible to focus only on the morose and seemingly insurmountable problems of the profession and its downward spiral, walking through those clouds of cherry blossoms by the Jefferson Memorial this week reminded me that even the harshest winters are followed by rebirth and renewal.
But in the case of the legal profession, we can't rely on nature to change things for us. Quite the opposite: lawyers are not highly receptive to change as a group. And it's only if we choose to focus on leveraging the positive opportunities that all of these changes in our professional environment open for us that we'll be able to enjoy a renaissance for our profession.
Here are a few key changes that, in my view, demonstrate that the glass – which many see as drained of possibilities – is actually waiting to be filled with new opportunities for lawyers, especially for corporate legal departments seeking new and alternative means to procure legal services:
1. The ABS Movement/Non-lawyer ownership and participation in legal service entities: Many lawyers are closely watching the ABS movement unfolding in the UK, Canada (Ontario), and Australia and wondering if the authorization of ABS entities means the downfall of the profession or presents a path to a new future for lawyers in legal services.
An "ABS" is an Alternative Business Structure, and the UK's Law Society, which is a pioneer in authorizing and regulating these structures, defines them as "a regulated organisation which provides legal services and has some form of non-lawyer involvement. This involvement can either be at the management level, e.g., as a partner, director or member; or as an owner – e.g., an investor or shareholder." Thus, ABS structures allow legal services providers and their in-house clients the opportunity to deliver services via a multidisciplinary team, or backed by financial investment and business/entrepreneurial leadership from beyond the legal profession and the partners in a firm. An ever-expanding array of bar-regulated legal service firms have joined the marketplace of providers in countries authorizing ABS businesses – from Big Three/Big Four consulting firm service groups, to new model law firms such as Riverview Law, to major law firm "service centers" (often in less expensive labor markets) which support the firms' clients through a business model different from the parent firm's traditional lawyerly practice. A large number of firms operating under a governance model that is based on the Verein system have offices in jurisdictions where they operate under an ABS model, and coordinate with U.S. offices which must remain – under current U.S./state bar regulatory requirements – separated from those practices. When the markets open in the U.S. to ABS, who is likeliest to blossom? Firms who understand how to integrate the best of all kinds of talented people and financial business opportunities? Or those who are still holding on to practices that have been fundamentally unchanged for hundreds of years? In-house counsel are more likely to see the incredible opportunities that ABS entities bring since they themselves work in an environment where lawyers collaborate with business people to solve problems on multidisciplinary teams every day of the week. And they will likely outsource more work that previously went to traditional law firms to ABS model businesses as they take hold and develop products and services targeted to the legal market.
If you see the profession's glass draining as a result of ABS, it's likely because you know that legal service providers that include expert non-lawyers will eat the traditional law firm's lunch. Or as in-house counsel, you'll worry that your client will replace in-house lawyers with less expensive and more flexible teams housed inside the company or in captive service centers. If you see the opportunity that ABS brings to the profession, you're wondering how long it will be before the state bars authorize similar structures in the U.S. so that you can invite all kinds of new partners to join you in your legal work – whether in a firm and a law department – to improve efficiency and productivity, expand service lines and global service reach through improved competencies, and better serve current and future clients.
Want to learn more about what's coming? The ABA Journal outlines how U.S. legal providers who aren't regulated as law firms are "eating law firms' lunch"; the ABA Commission on the Future of Legal Services is studying and proposing reforms that will include ABS-like proposals, and a groundbreaking new U.S. state regulation (from Washington State) authorizes non-lawyer ownership in law firms.
2. The redefined pool of talent – who is best trained to solve your legal problem? I wrote a previous piece for this publication on the changing skill set for lawyers who want to succeed in the "new-law" environment. What is key to understanding the importance of skills in this changing marketplace is that quality legal skills are increasingly fungible – that doesn't mean that they're not critical, but simply that there are hundreds, or thousands, or hundreds of thousands of lawyers out there who can provide clients with high-quality, expert legal services. "Quality legal work" is no longer the distinguishing characteristic that defines a firm, a department, or an in-house client's experience. What does distinguish lawyers in their clients' eyes is their ability to solve problems, bringing forward whatever is needed – skills, perspective, benchmarks, data, business savvy, institutional knowledge of the client's industry, etc. – and create a solution for the client. It goes back to my favorite saying: Corporate clients don't have legal problems, they have business problems. And as their lawyer, you need to bring your business game whether you serve the client in-house or in an outside firm.
If you see the profession's glass draining as a result of this focus on skills beyond "substantive legal expertise," it's likely because you don't see the value of a multidisciplinary approach, which involves teams of lawyers working with all kinds of other workers who bring their own expertise. Or because you don't want to think about how to expand your own skill set – you're an old dog scoffing at doing new tricks. You will want to draw a line around "the practice of law" and try to prevent anyone else from doing it, and scorn or try to diminish the value of those who provide services outside of your lines. But if you see the opportunity in this new focus on multidisciplinary talent and teaming, you'll want to offload less interesting work (again, in either your law department or in your law firm) that you can train other competent workers to provide, spend time thinking about how you'll focus on what your highest value is to your company and how to leverage that, and look at the teams within your business and in your community of firms and coworkers with whom you can collaborate, in order to increase the value of the business solutions that lawyers in your group provide for your clients.
3. Technology, data, and the new legal service business model: While there are a whole lot of additional points I could make, I'll conclude by wrapping together a few developments that some lawyers are looking to embrace and others are desperately trying to avoid. For many clients, things that they used to hire a lawyer to do can now be done via technology and automation without any lawyer involved: contract management systems, a simple will, basic research into the legal repercussions of an action or what a regulation requires. Data is easily available to inform organizations how 94% of other companies (or even your company's past experience) with a similar problem addressed the issue successfully. And there are new providers in the marketplace using technology as a critical component of their business models that assure consistent quality of service, high-efficiency results, and lower-cost delivery – these services are founded on business models that don't value services based on the cost of an hour of an expert lawyers' time, but on the value or worth of that service as delivered in the marketplace of consumers by workers who are properly priced and trained to task. These systems are more and more likely to find their place in corporate legal department operations and outsourcing strategies.
If you're in a traditional law firm or law department environment, maybe you see the profession's glass draining as a result of a new model of service valuation that focuses more attention on results than long hours logged by an expert lawyer doing the work "by hand." But if you see the opportunity that this kind of market opens to lawyers in law departments (and to firms that wish to improve their profitability and efficiency), then you are excited by the idea that the results you need to deliver every day can be process-managed for efficient and accurate delivery – no artisanal service delivery is needed for repetitive work unless the matter truly calls for a new wheel to be invented.
Long and short – it's springtime for the profession. We can choose to come out of hibernation, sprout some new perspectives, and plant seeds that will grow and flourish for the time to come. Or we can perversely try to preserve that which all of us seem to think is broken and in need of serious change if the profession is to remain relevant and vibrant. What's your choice? Change and the opportunity for rebirth is in the air; like it or not, here it comes!
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Susan Hackett is the CEO of Legal Executive Leadership, LLC, a law practice management consulting firm she founded in 2011 after serving as the Senior Vice President and General Counsel of the Association of Corporate Counsel (ACC) for more than two decades. As an insider working with thousands of top corporate practice leaders, Susan has an amazing breadth of experience with the inner workings of in-house practice and the implementation of value-based legal models, as well as an international reputation for innovation, excellence, and success. Comments welcome to hackett@lawexecs.com.
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