In my series of three articles regarding the legal challenges posed by the UK´s Legal Services Act, I refer to the differences between the traditional law firm business model and the innovative or alternative business model. However, I do not mention the concepts that have arisen to define them. Each one of these business models represents a distinct way of providing legal services and they are known as BigLaw and NewLaw, respectively.
In George Beaton´s words, an Australian consultant and futurologist, BigLaw and NewLaw do not refer to the size of the firms or when they were founded. With a clear focus on technology and innovation, NewLaw seeks to better respond to client´s needs and to deliver disruptive legal services. Nevertheless, experts differ in their definitions of these terms. On the one hand, Beaton describes NewLaw as the antithesis of BigLaw. On the other hand, Jordan Furlong, another important Canadian consultant and futurologist, adopts a wider definition of New Law that encompasses not just law firm models, but also other combinations and technologies that transform the way of delivering legal services and are focused on creating customer value. In this regard, Furlong describes NewLaw as “any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed.”
Regarding BigLaw firms, the truth is that some of them are well aware of this irreversible changes and do not want to be left behind. Hence, they are making adjustments to improve their productivity and efficiency. Allen & Overy is a case in point. The firm has launched Peerpoint and has released its own report regarding the future of the legal services market. Other examples include DLA Piper –shareholder of Riverview Law– and Berwin Leighton Paisner –which launched Lawyers on Demand–.
However, the truth is that changes are just taking off and only time will tell if BigLaw firms are capable of adapting to the new environment. In this respect, the outbreak of technology is going to be exponential. In addition, to this day, licences to become an ABS are granted in the United Kingdom and Australia, and Canada will come next. The US will follow sooner or later, and then the world’s largest legal market will change forever.
On the other hand, clients themselves are the greatest threat for BigLaw firms because they are becoming increasingly aware of the limitations of this model and many of them already know and/or work with more innovative firms. In addition, in many cases clients are insourcing or increasing their law departments –since lawyers will thus have first-hand knowledge of the business and can anticipate potential legal conflicts– and therefore reducing reliance on law firms. For instance, in the United Kingdom, the number of in-house lawyers has doubled over the past decade.
Another issue that I wanted to address is that many top tier law firms seem to believe that they are not going to be drastically affected by these changes because they provide high-end or “bet-the-company” services. In this regard, we generally tend to consider that technological devolopments have a critical impact mainly on more standardised services or commodities. However, the truth is that the borderline between these two types of services is not that clear. Thus, the work of top tier law firms is not exclusively limited to critical services. On the one hand, commodities can result instrumental in a case –specially in the legal realm–, and, on the other hand, in many cases specialized work requires the execution of non-strategic tasks.
Accordingly, the underlying idea behind the NewLaw model is the need to enhance efficiency in legal service delivery, in such a way that each task should be performed by the best suited person (or machine or robot) with the right skills and abilities to deliver the best outcome. Hence, the advent of technology and the development of multidisciplinary teams and horizontal structures will lead to a more efficient delivery of legal services. Moreover, with the help of technology, firms and clients will have to be integrated to remove the remaining barriers regarding communication and information exchange. This will enhance the quality of service delivery and foresee –and therefore avoid–potential conflicts by means of a better understanding of the client´s business.
Do you think BigLaw firms will adapt to the changing environment?