In a recent interview by Yves Faguy, senior editor of National Magazine, Jordan Furlong presented his view of the state of the legal market in 2014 and where it’s headed in 2015.
Jordan Furlong is a lawyer, speaker and industry analyst, who is one of the world’s leading commentators on the new ways in which legal services are created, priced and delivered. Based in Canada, he recently authored a major report for Lawyers on Demand entitled The New World of Legal Work, which we have previously written about in the Legal Innovation Blog post “A new world of legal work – agile lawyers and smart machines”.
In this National Magazine interview – “2015: Jordan Furlong on the state of the legal marketplace” – Jordan looked back at 2014 and events such as the Heenan Blaikie collapse, and made predictions about the impact of the drop in oil prices, legal market de-regulation and new service providers. As Jordan started to point out, 2014 has been quite an astonishing year. We are now living in a new legal present, and the pace of that change is accelerating. One of the things that stood out the most, especially from a Canadian perspective, was naturally the collapse of Heenan Blaikie. Jordan explained that the most frequent question he gets is if there will be more Heenan Blaikies, but that he believes the answer to be “no” as it is still very rare for big law firms to go down:
“Heenan encountered an extraordinary array of circumstances, pretty much all at the same time. /…/ There were issues of competition, there were issues of compensation and leadership and all these things. But fundamentally […] the market here is still very strong. And to me one of the best indicators of that is how quickly so many Heenan partners were absorbed into other large law firms. So I think this is still a robust market, but of the many lessons that firms should take from Heenan Blaikie is that law firms really are fragile.”
Other big law firm collapses, such as US firms Howrey and Dewey & Le Boeuf, also had it’s own special cases of malfunction. But the pressures are not unique, and there is a lot for everyone to learn from these law firm failures:
“Conditions are going to be more and more difficult, the headwinds are going to be stronger. When you are dealing with institutions which are fundamentally fragile in which almost all your assets leave every single day, your margin is very small. Law firms that are smart about the future will be looking at ways to increase those margins.”
The change process has already been in place for a while, which for example has been manifested in the Canadian Bar Association’s Legal Futures Initiative. As Jordan points out, this is the first time a Bar Association has asked for more non-lawyer involvement on the legal market. Find out more about Jordan’s thoughts on the groundbreaking significance of the CBA Report here: “Watershed: The CBA Futures Report” »
Jordan then put the legal market changes in Canada in an international context and made comparisons to the changes in US, England and Australia. He talked about how Canada tries to take the best from different influences. The Legal Services Act (and especially the ABS provisions) in UK is the driving force for many of these changes and UK is now the legal work laboratory which is attractive for many legal jurisdictions to follow. But in US regulatory reforms are not high on the agenda. In this context, Jordan also talked about some interesting technological solutions and new entrants on the Canadian market, such as Access Law – a law firm running its business in Walmart shops and providing affordable, convenient legal services. Similarly, in UK, Co-op (The Co-operative Legal Services) provides fixed fee pricing at affordable rates, and in US, Sam’s Club members are getting a discounted rate on Legal Zoom. It’s not accidental that these kind of services emerges on these three places simultaneously. Thus, Jordan believes that fundamental shifts in the legal services environment will spawn a diverse population of new providers that will expand access to those services while destroying lawyers’ market exclusivity.
Watch the complete interview here: National Magazine . 2015: Jordan Furlong on the state of the legal marketplace »