In the beginning of a new year it is always exciting to try and analyze what news that lay ahead and what trends to expect during the coming year. Or, if you are interested in legal technology, you may even more specifically want to know ‘What are Richard Susskind’s predictions for the coming year?’. In the recent blog post “Richard Susskind’s Crystal Ball” Richard Susskind is asked what he thought would be hot topics for 2012. In an interview, available via this blog post, Richard Susskind outlined what’s in store for the coming year:
“The key defining feature of 2012 is going to be what Susskind calls the ‘more for less challenge‘. General Counsel are under increasing pressure to deliver more legal services for less cost. As such they are going to be expect law firms to take a look at how they are working and expect them to deliver more efficient practice. The effect of AFA’s is time limited, and reducing charges just simply isn’t going to cut it. 2012 is all about readdressing the way things work, its about working differently.”
Another wise and very insightful predictor is Jordan Furlong, who in his recent post “The year of living dangerously” has predicted the coming year to be the year “in which the limits of perseverance will be reached and breached. There are just too many places within the traditional legal community where resistance to change will weaken and ultimately collapse.”
Jordan Furlong points out three particular trends for the coming year, i.e.
- Disappearing law firms
- The rise of Asia
- Alternative business structures
The trend with mergers and acquisitions of law firms picked up pace in 2011, as a way to adjust to the new rules on the market. But there were even firms that did not even make it to the acquisition stage, they just disappeared, with Howrey LLP as the most famous example. In the Asia-Pacific region, the merger of China’s King & Wood with Australia’s Mallesons has resulted in a strong competitor to the global law firms and they, or other Chines law firms, may start going west and begin breaking into the global legal market. In addition hereto, the impact of the Legal Services Act and the opening up by the UK’s Solicitors Regulation Authority to applicants that want to become Alternative Business Structures must be the start of a new reality, not only in the UK, but globally.
According to Jordan Furlong, “those are three reasons to think that 2012 will be the year that the pressure relentlessly building on the fault lines of the traditional legal marketplace will finally produce the quakes we’ve been expecting for a while. And here’s one more: macro-economic and geopolitical events will play a role in the legal market as well. Europe’s financial situation is unsustainable, and the odds of something truly ugly taking place there and spreading worldwide seem to increase every month. The 2008 Lehman Brothers collapse and the resulting western financial crisis was the first shock to hit the legal system and generated a tidal wave of change. The next one could be bigger.”
The SCL IT Law Community has collected responses from influential legal technologist on the “Predictions for 2012: Technology and Strategies for Lawyers”. Some of the participants are Jan Durant, IT Director of Lewis Silkin, Charles Christian, Editor of Legal Technology and more, Arlene Adams, CEO of Peppermint Technology and Alastair Morrison, Strathclyde University. It is well advised to read the complete responses, but here are some of the predictions we would like to highlight.
Many of the contributors talk about the “Working smarter”-trend. Jan Durant predicts that 2012 will be about getting more out of our existing technology and working smarter and that we will be examining in what areas of legal services we can leverage workflow tools and document assembly to assist the lawyers in delivering what they do.
In line with the predictions by Richard Susskind and Jordan Furlong, most of the contributors also emphasize the new competition by new entrants with disruptive business models, enabled by technology and the Legal Services Act. Arlene Adams predicts that customer loyalty levels will reduce and clients will increasingly shop around. The market will become far more competitive. Providers will use content to attract and acquire new customers. Tom Hiskey predicts that 2012 will be the year that technology and online legal solutions finally come to the fore. With announcements from US online behemoths Legal Zoom and Google-backed Rocket Lawyer of plans to enter the UK market in 2012, this looks set to change.In tandem, big names in the UK (AA, Saga, Co-op, etc) will finally get their act together and provide something new and (hopefully) exciting. Thanks in part to the Legal Services Act, they’ll use technology to improve the way they connect to clients, offering consumers new and easier ways to conduct legal tasks over the Internet.
Finally, most contributors to the SCL collection, emphasize the rise of the iPad and its impact on the legal practice. Jon Bloor even predicts that 2012 will be the year when tablet users start to question Microsoft Word as the standard lawyer’s writing tool.
Jerome Kowalski has also made a collection of what to expect in 2012 in his post ” Trending for Law Firms in 2012: What to Expect This Year” with an extensive listing of thirty items affecting the legal profession that are guaranteed to dominate the headlines in 2012. Some of the trends predicted for 2012 are the following:
- Continuing decline in legal spend on outside counsel.
- Increased direct competition for the legal spend from LPO’s and other alternate providers of legal services.
- De-equitization of partners and reductions in head count will continue.
- Law firms establishing subsidiaries to engage in services complementary to their services.
- The urge to merge will continue.
- Increased focus on collaboration, within the law firm, vertically with clients and horizontally with vendors of support services and co-counsel.
- Law firms will make more investments in technology than in people. The IT hotspots are knowledge management, software to farm information for the purpose of responding to RFP’s, making an AFA proposal, based on prior similar work handled by the firm and for project management purposes.
- Every lawyer will tuck an IPad under his or her arm and no lawyer will attend a meeting without opening one. Continued development of apps for lawyers will simply make this tool not only essential, but a lawyer not having an IPad at the ready, risks a serious loss of credibility.
It is always exciting to predict a coming year, but it seems that this year will be more exciting than most. All predictors seem to agree that 2012 will be a most challenging and interesting year. Change, or as some has even predicted, revolution is ahead! The legal market is changing, but for law firms willing to accept the new reality this should be regarded as an opportunity, not something to resist. By being innovative and embracing change, new technologies and new ways of providing legal services law firms can step up and be market leaders. Leaders who are innovative will still be prosperous, but followers and late adapters will be dragged down to cost competing and struggle for survival.
Or, as concluded by Jordan Furlong: “If you like living dangerously, then by all means, plan for 2012 to be another year of raising rates, de-equitizing partners, downsizing staff and taking whatever other measures you feel will continue to prop up the artificial and increasingly archaic metric of profits per partner. Keep on doing what you’ve been doing lately, just more of it. You might yet manage quite well, if your financial position entering the year was rock solid, your firm culture intensely positive and your relationships with clients extremely sound. But if you feel like your foundation is a little shaky, your strategic direction has meandered, or your morale is brittle, then I think you’d be well advised to pay close attention to what comes next. We were warned.”