The dinosaur, the lobster & the lawyer

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the demise of the dinosaurs (2) copyWhat happened between the time you went to sleep last night and you woke this morning?

The world changed.

Such is the high tech, consumer orientated, competitive,“must have now” knowledge and information world we live in,change is the only constant.

Even the legal profession, so ensconced as we are in tradition and precedent and at times driving by looking in our rear view vision mirror, is no longer immune from the changes that often affected other industries and professions.

Some people love change. Some people thrive on change. Indeed what a boring world it would be without change. Most of us like some form of change be it a new shirt, a new car,a new holiday destination. Change can be invigorating, stimulating and exciting.

Some of us love change but only if we can control it. We can control our purchase of a new shirt, a new car or a holiday destination. We can’t control the change in weather.

Some of us like change because we like surprises -but only if we receive a benefit or a positive experience from the surprise. We don’t like surprises if they result in negative or bad experiences.

For us lawyers in particular who are often stereotyped as risk averse, control freaks, and perfectionists, we fear change or surprises unless we are absolutely certain and guaranteed they are going to be good for us. The thing is,in business just as in life, there are fewer and fewer absolute certainties.

Think back if you can in your own practices say 5 years or so ago. Have things changed in your practice? Are you still doing work the same way with the same clients with the same people with the same tools at the same price now as you were then? I suggest if you are then you were either so innovative and ahead of the pack that only now is the rest of the world catching up to you, or you are delusional,or else love paleontology and the study of dinosaurs so you will have some idea how you will see out your days.

I was speaking with a law firm partner in his early 60's who was pondering and reminiscing.“Why are clients no longer loyal?” “Why do we have to do monthly reporting?” “ Why are they insisting on a fixed fee or a quote?”. " Don't our clients understand the cost pressures we have and how difficult things are?"And then he said something really interesting-but I don't think profound- “I will be so pleased when the economy improves because we can all go back to the good old days”.

I am sorry, even with a return to more stable and prosperous economic times, I do not think there will be a return to the “good old days” in many ways when it comes to the provision of legal services. Notwithstanding the nobility of our profession, if it ever did, the world no longer owes us lawyers a living.

At a  recent Conference for managing partners of small and boutique law firms every presenter spoke about fundamental structural changes in our profession-not cyclical changes but structural and game breaking changes.

Tim Aspinall the Managing Partner of DMH Stallard a mid size commercial London law firm spoke about the enormous changes and disruption to the UK legal profession since market liberalisation and the allowance of Alternative Business Structures. It has totally changed the face of the provision of legal services in the UK especially at the consumer to High Street firm end.Literally obliterated some of those firms and their practices-even though the profession had some 3 years notice to get ready and adapt to these changes most firms did not think it would affect them.It would be naive to think some of these regulatory changes and the flow on effects in the UK will not find their way to our shores sooner rather than later.

Interestingly one of DMH Stallard’s responses to some of these changes was to recently enter into a strategic alliance with Riverview Law the fastest growing fixed fee law firm in the world.

John Kain of Kain C+C Lawyers a boutique  commercial firm in Adelaide gave an insightful presentation on the changes to the practice of law since since Roman times.For the Australian legal profession John highlighted some of the regulatory changes and the move from the old regime of "prescribed" legal work- which effectively protected lawyers, and allegedly our clients, for nearly 100 years from the evils of non lawyer competition- to a more liberal and open market policy allowing for greater competition including of course non lawyer ownership of law firms.

There is no point complaining to politicians, Law Societies or the public for a return to protectionism of lawyers-it just isn't going to happen.

In Australia innovators & disruptors to the legal marketplace include:

There are more of course, and many more to come.

It is no longer a throw away line that one day technology-especially predictive coding- may well replace much of what lawyers do today. It will. It is.Right now.

Add to all this the recent and ongoing global law firm mergers and the cascading effect that is having on the Australian profession;the cannibalisation of the legal market generally ;accounting and other professional firms doing more and more legal work;the “revenge of the client” with clients able and willing to flex their purchasing muscle, and is it any wonder the mid to long term future of private law firm practice like we are used to,is at best unclear and uncertain and at worst doomed.

Clients these days have so many more choices in regard to where and how they obtain their legal & business advice and at what price. And increasingly it will not be just from law firms.

We are seeing the effect all this and more is having on the traditional leverage based pyramid business model,on the revenue and profitability of firms and on the cultures within firms. For the first time in many years there will be a number of graduates and trainees unable to find jobs in private law firms.Increasingly clients are jacking up having to pay for “on the job” training of our young lawyers via charge out rates and not unreasonably are now expecting the law firms to carry the cost of same.

Is this just all consultant scaremongering? I don't believe so.Most informed commentators and observers of our profession agree as would-privately at least-many of the law firm leaders themselves.

Of course I am not suggesting all firms are feeling all these effects at least not yet, and for many there maybe no "burning platform".But like the lobster in the pot of water with the heat being gradually turned up- it is a nice warm feeling for a while but it does not end well for the lobster.

I repeat it is little use complaining about any of this. We are not going to be able to hold back the tide and it is pointless trying.

Tom Peters said “If you don’t like change you are going to like irrelevance even less”.

And as a profession I think if we don’t respond positively and do something like change some of our mindsets and archaic business models*, we run the real risk of not only becoming increasingly irrelevant to the community and businesses of the future but to smart young intelligent people who might otherwise have chosen law as a career.

Just as there are significant speed humps ahead of the profession there are also enormous opportunities for the innovative, the courageous, the flexible and the focussed. It wont be easy and it will be challenging and it will be full of uncertainties and doubts, and firms will have failures just as they will have successes. Firms will also have cowards just as they will have heroes.

The alternative?. Complacency and apathy are not viable strategies.Doing nothing is not a viable strategy. These days they each lead in a similar direction-straight to the lobster pot or to the study of paleontology.

 

 

* you can learn more about how to have a different business model and be a law firm of the future instead of a law firm of the past by attending the Law Firm Of The Future forum in Sydney Thursday 17 October 2013. Download Program & Register here