Legal Innovation Blog

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Our Legal Innovation Blog is dedicated to discussing the latest issues involving knowledge management, business development and new and exciting technology developments to use for leveraging your knowledge assets. Under Hot Topics we have gathered more indepth explainations to our approaches to knowledge management, the strategic use of IT and business innovation.

  • 2014-11-21

    The Era of the Entrepreneur

    Legal Futures Annual Conference had the theme "The Era of the Entrepreneur" this year, with a new approach to the legal market - the entrepreneurial side of lawyers and non-lawyers. The aim of the day was to put to bed the myth that lawyers can't be entrepreneurial, but also to mark the increasing contribution that non-lawyers are making to develop the legal market. As Neil Rose, Editor, Legal Futures, said in his opening remarks, it has not always been easy being a non-lawyer in a lawyer's world, but all that is changing. A decade ago, just the thought of a non-lawyer partner was unthinkable; now professionals with a wide range of skills and experience from outside the law are at the forefront of some of the most innovative change we have seen to date. The question of the day was if it takes a non-lawyer to change the legal market or if lawyers will step up to take the lead?

    Legalfutures The Era of the Entrepreneur

    Photo by Pro Photo Events (via Michelle Hynes) from The Era of The Entrepreneur.

    Key note speaker Jordan Furlong, lawyer and industry analyst, Edge International, gave a very good and thought-provoking overview of the changing legal marketplace in his speak about how the walls are coming down. He presented his views on how the fundamental shift in the legal services environment will spawn a diverse population of new providers that will expand access to new legal services while destroying lawyer's market exclusivity. He built his speak around the following nine main features of the emerging legal market, proving how we are no longer predicting a new legal future, but actually living in a new legal present:

    1. New structures will grow their market share
    2. Lawyers will move up the value chain
    3. Legal technology will explode
    4. The online legal market will flourish
    5. Justice will become more privatized
    6. Managed processes will multiply
    7. Mystery pricing will come to an end
    8. Compensation will track profitability
    9. Clients will do more by themselves

    The new providers are changing the client's expectations on legal service; the way it is provided, the costs for it etc. To respond, law firms must adopt their business to the changing client expectation. In order to move up the value chain, lawyers have to deliver low-end work hyper efficiently and focus their time on consultancy work. Anything that can be used to improve the speed and quality of legal business should be used. Technology has to be integrated throughout the law practice. To tech-averse lawyers, Jordan Furlong pointed out that "the type writer and the fax machine was technology in law practice in ancient times, so try to be open to new technologies and adopt it in time." Considering that the online legal market will flourish in coming years, law firms must productize their knowledge and expertise The one to one, in person, way to make legal service transactions is very limiting. Instead, law firms should package and put together the skills into an interactive 24-7 available product.

    Jordan Furlong also predicted that managed process will multiply. Every law firm in the world is full of processes, but most of them are implied, not documented and illustrated in flow charts. The management of process and people is going to be more and more important (and unfortunately nothing that you learn in law school). Therefore law firms have to map out their operations to improve quality.

    In line with the process focus there will also be a shift in focus from revenue to profit, keeping track of internal costs spent. Explicitly mapped out operations and processes can give clarity on cost and track profitability. Law firms need to find better ways to measure and reward value contributions, in order to start making pricing predictable, yet profitable for the firm. Soon "mystery pricing" will come to an end. Predictable fees may be hard but clients will insist on it and the development toward more predictable pricing will be led by non-lawyer service providers.

    Clients will also do more and more of the legal work by themselves. The increased consumer power and the increasing knowledge and tools available are giving clients the possibility of self-navigation, to make their own ways through the legal marketplace. To respond to the unbundling trend law firms need to increase options for their clients and all legal system users; to empower the client.

    The findings in the latest LexisNexis Bellwether Report was then examined and discussed by a group of well-known entrepreneurial lawyers. According to the report independent lawyers are feeling more confident about the future of their practice than ever. But which are the characteristics for an entrepreneur, whether a lawyer or a non-lawyer? In the Bellwether Report the hallmarks of an entrepreneur that we all could do good to adopt are the following:

    • A clear view of strategic goals
    • Passion for business management
    • Keenness to implement change
    • Appreciation of the importance of technology
    • Outward looking stance - to other industries for best practice ideas
    • Higher level of outsourcing
    • Higher level of top tier experience

    Or as quoted by one of the respondents: "We take the elements and turn them on the head… We are doing things in a new and refreshing way."

    During the day we also learned the term "JFDI", courtesy of George Bisnought, Managing Director, Excello Law. As a lawyer you can easily be too risk aversive sometimes - to be entrepreneurial you need to follow the rule of JFDI ("just f-ing do it"). And if you don't have that mindset yourself, it is recommended to have someone entrepreneurial on the board. Alex Hamilton, CEO, Radiant Law, agreed and explained how his biggest mistake during his entrepreneurial career was to act like a partnership when establishing the new innovative business in Radiant Law. Alex Hamilton also explained how the nature of law firm structures and culture drives entrepreneurs out of the business early, which makes it easier to start with a clean sheet than amending existing partnership.

    During the day there were a lot of discussions about the hand dryer analogy with comparisons made of the old traditional hand dryers and the new "Dyson" dryers. After several years with the traditional hand dryers, a completely new type of hand dryer emerged on the market:  the "Dyson" dryer. Suddenly most companies were switching to them even if they were more expensive, since they were more environmental friendly and much cheaper to run, which mean that they were cheaper in the long run. The old traditional dryers were cheap up front, but messy and expensive in the long run. Law firms continuing to what they did ten years ago might become irrelevant due to new "Dyson" legal providers. It won't help old traditional law firms trying to lower the hourly costs since their services can be considered "messy and expensive in the long run". These new legal providers might not compete with low prices but provide transparent unbundled services that, for clients, will be cheaper in the long run.

     

    VQ and Alex Hamilton at Era of the Entrepreneur VQ's Helena Hallgarn and Ann Björk attending the Era of the Entrepreneur event in London. An interesting day and nice to meet up with planned VQ Forum speaker Alex Hamilton and lots of other inspiring legal professionals.

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