We wish all of our customers, partners, fellow knowledge management and strategy professionals and friends a Merry Christmas and a Happy New Year. Thank you for all positive response, encouragement, support and exciting assignments. We look forward to more inspiring contacts next year.
Legal Futures Special Report Innovation in the City on the Rolls-Royce dilemma
This report focuses on how much has changed in the legal market in the last few years from a UK City firm perspective. The first part of the report contains an overview of where we are today, with the ongoing industrialization of the law, to which many of the firms are responding by using new technology to break work up in a smarter way.
The second part recounts a roundtable with many of the most forward-thinking lawyers in the City discussing the “Rolls-Royce dilemma”. The new client demands have made law firms respond with discounts, lower rates and fixed prices, but is it all just about finding cheaper ways of doing what you do, or does there need to be a more fundamental rethink? The dilemma this challenge poses was outlined by Jeff Triggs, Slaughter and May as the Rolls-Royce dilemma:
“Obviously I would like to produce a Rolls-Royce at a Rolls-Royce price, whereas the client comes to me and says, ‘I only want to pay for a BMW’. I have now got to the stage of ‘Yes, okay, we will do it for a BMW price’. What I personally have not got round to yet, is producing anything other than a Rolls-Royce.”
It is clear that firms need wising up to the need to put together a far more sophisticated menu of options for completing a particular task, involving lawyers, paralegals, technology and outsourcing, to name but four. New service providers achieve this by using process and technology in combination with a different methodology, but, as pointed out by Neville Eisenberg, Berwin Leighton Paisner, in a traditional law firm the ingrained culture makes it harder: “Working differently really goes to the heart, often, of people’s self-perception of their sense of professionalism. But then the process for producing a Rolls-Royce has changed over the last 20 years or so, and will continue to do so, even though the end product will be the same, if not better. What we are finding is where we really investigate the processes and change them to make them more efficient, not only are we able to do it at a lower cost internally, but the end product looks better; not least because the lawyers enjoy the work more and seem to have a sense of greater control over the process.”
It might even be that this dilemma might help grow the market, as more efficient working methods may enable the production of more legal Rolls-Royces than before, as pointed out by Tim Stocks, Taylor Wessing: “We should not assume the market for our services is shrinking, because the market can expand. It can do things better, and differently.”
IBM’s Watson manages prices better and other interesting articles on pricing
In the Law Technology News article “IBM’s Watson Coming to a Firm Near You” IBM explains how Watson is not a product, but a cognitive platform that could be used in the legal industry for three main tasks: (i) as a kind of automated associate providing quick answers to legal questions, (ii) as a legal researcher searching for precedents or evidence needed for legal cases, and (iii) to focus on the process of law. “Watson could pull out key predictors within the complaint to provide a set of operational data to allow an attorney to make a data-driven, informed decision about how to pursue a matter. Insofar as those insights help firms do a better job at pricing a matter, then that’s a good use for it.”
In the Validatum blog post “So, You’re Going To Nail This Pricing Business in 2015?”Richard Burcher has made a comprehensive list of the main issues you need to tackle when you want to implement a changed pricing strategy. Read also “What Is The Optimal Hourly Rate? One That Doesn’t Produce Any Profit” for pricing strategies that benefit both law firms and clients.
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MERRY CHRISTMAS AND A HAPPY NEW YEAR!
Ann Björk and Helena Hallgarn