Law Firm Leaders Forum 2015 — The Parallax View: An Annual Report on the State of the Profession and Business of Law
The 20th annual Law Firm Leaders Forum began this morning with an introspective look at the state of the legal industry.
Ralph Baxter, chairman of Thomson Reuters Legal Executive Institute began with a review of key data points from the Peer Monitor Index. Citing that the total size of the current legal market sits at $437 billion, he asked attendees to focus on the sliver of the LPO market that currently only occupies $1 billion of that, but will grow at 30 percent annually moving forward and change the legal marketplace.
“We know that the demand for legal services among corporate clients is increasing, and yet the perception is that demand is flat, or less,” Baxter noted.
As Baxter observed, most analysts agree that the law firm of the future will look different, but how it will look is another matter. Technology and collaboration with outside third-party providers will lead the charge, but a number of factors have become frustrating for firms.
He also outlined five key differentiators that may be the hallmark of the law firm of the future:
- Service model
- Resource model
- Financial model
- Pricing model
- Investment model
There are more people that write about the law firm than any other industry, and so they are prone to hyperbole, quipped Brad Hildebrandt, chairman of Hildebrandt Consulting LLC. He added that mergers and consolidation – even lateral hiring – are also among the factors facing the global legal market. But in some sense, it’s a lack of vision for the future that may be the greatest obstacle to the legal market.
Hildebrandt noted that there was a time you couldn’t practice law across state lines, which today seems like an antiquated notion. But while forces like technology and pricing pressure on billable rates may force firms to change, there are more tangible, controllable things law firm leaders can do to ease the transition into the future. In fact, it’s issues like client relationships and access to justice that firms should focus on.
“The billable hour is not going away,” assured Hildebrandt.
“When there’s a problem, a general counsel doesn’t want to talk to a machine, they want to talk to someone who understands their business, but even more so, understands them,” Aric Press, partner with Bernero & Press LLC noted.
“We live in a world now where clients demand loyalty from us, but clients are out shopping all the time,”Jami Wintz McKeon, firm chair, Morgan, Lewis & Bockius LLP, added. The panel noted that firms that neglect the client relationship do so at their own risk, and a majority of the discussion around the importance of forging strong relationships with the client.
“Where do you get your new business? You have to take it from somebody else,” Bill Hubbard, immediate past president of The American Bar Association and partner with Nelson Mullins Riley & Scarborough LLP, added.
Noting the importance of changing the way firms do business, McKeon noted that that work of looking at alternative models should be the task of the best people at the firms, not the people with nothing to do.
Access to Justice
Hubbard presented compelling data from American Bar Foundation that looked at the growing justice gap in the U.S., citing that 66 percent of Americans have encountered a rights issue in the last 15 months, but only one fifth sought legal assistance. He added that those that do seek legal assistance from legal aid office half are turned away for lack of resources.
Why should firms care? Simply put, clerks of court and staff spend so much time helping those unfamiliar with the justice system navigate the court it clogs the system. Closing the justice gap, the panel agreed, should be a shared goal.
Astute firms, Hubbard noted, are forming partnerships with local legal services providers to help improve access to justice by offering pro bono services.
The panel also offered that technology and innovation can help solve the problem, after all, venture capitalists aren’t afraid to push into the space.
“If a majority of people have access to a smartphone, why are we not getting to people that way?” Hubbard challenged.