Legal Revolution

In the recent Legally Business article New start for the legal market (in Swedish) VQ founder Helena Hallgarn is interviewed among others on the changing legal profession. From an international perspective, the market has already begun to change fundamentally. New types of services are emerging, offering similar services to cheaper prices. – Technology is of great importance. When it is used more effectively, law firms have to review their work and rethink their processes and what services they deliver. It will no longer be possible to only use hourly billing. You have to be clear about what tasks you undertake in order to be able to price correctly, she says.

The opinions expressed in this article are also in line with the conclusions made at our recent VQ Knowledge and Strategy Forum. Key note speaker at the forum was Professor Richard Susskind, who gave his predictions on the future of legal services.

At the forum Susskind predicted that the future for lawyers could be either prosperous or disastrous – lawyers who are unwilling to change will struggle to survive, but lawyers who respond to the changes and embrace technology and new ways of providing legal services will find opportunities for new and exciting lines of business. Clients are under pressure to reduce internal headcount and external spend, but they also require more legal and compliance work involving greater risk. Susskind believes that this challenge – to deliver more for less – will define the next decade for legal services and that law firms can meet this challenge with two different strategies.

The first is the efficiency strategy, where focus is on reducing costs of routine legal work and generally to make the legal service more automated along the line from bespoke to standardized, systematized, packaged and commoditized, as well as by using new ways of sourcing the legal work by outsourcing, off-shoring, sub-contracting or combined multi-sourcing ways. The second strategy is the collaboration strategy, where law firms ask clients to share the costs of legal services, by online closed communities for collaboration, by online legal services, automated drafting and electronical legal marketplaces.

Both strategies involve innovative use of technology and a new way of identifying the real needs of the clients. As Susskind clarified at the forum, law firms and clients seem to have a different approach to legal services, as illustrated by the “fence on the cliff versus the ambulance”: Clients want legal risk management, not legal problem solving, they want dispute avoidance, not dispute resolutions, i.e. clients want a “fence on the top of the cliff, not an ambulance at the bottom”. Unfortunately however, most law firms have focused on making the ambulance better and faster, and not focused on providing fences. Susskind therefore emphasised that law firms have to change their structure and to rethink their business completely from pricing differently to working differently. The golden age of profitability for law firms have passed. Leaders who are innovative will still be prosperous, but followers and late adapters will be dragged down to cost competing and struggle for survival.

Technology has also enabled innovation in the form of new services and new business models, such as branded chains like Quality Solicitors, well-established retail brands like the Co-op now offering standard legal services, comparison websites, ‘freemium’ legal services like Legal Zoom and Rocket Lawyer etc. As Joanna Goodman analyze in her article, UK law firms are increasingly recognising Susskind’s contention that they will have to change the way they work radically by becoming more business-like and leveraging new and emerging technology.

Maybe there really is a legal revolution on the way as stated in the byline in the Legally Business article?