Editor’s Note: The author of this post is a consultant to law firms.
By Mark Klender, Principal, Deloitte Consulting
As we end 2015 and go into 2016, we find the legal industry in a state of considerable consternation.
Both a time of disruption and opportunity, it is fascinating to watch the transformation slowly unfold: Those that shield their eyes to it stand to be blown aside, while those that recognize it can ride the winds to safe harbor — and to greater success.
Like a tsunami, which takes time to make landfall, change is quietly rolling throughout the legal industry, and in small increments at most firms. But sometimes it takes a storm to recognize something is amiss and that you were not ready for it.
Going into 2016, we offer ten axioms framing the industry:
- The demand for services has changed, with growing segmentation in the nature and delivery of services
- Competition is intensifying and morphing, coming from unanticipated realms
- Corporations are buying legal services differently, and will continue on the path of rationalizing providers through strategic sourcing
- The aura that once made legal departments unique within the corporation is continuing to get peeled away and they are joining the ranks of shared services
- Cybersecurity will continue to nag the industry, with risks for many and cause for problems for some
- While many advances are taking place in point solutions, the legal industry will still be befuddled on how to make technologies seamlessly work together
- M&A among law firms will continue, justified primarily as adding market share and talent, but synergies and value will be elusive
- Firms will continue on the march to greater professionalism in how they operate and are organized, led, and managed
- While the industry is awakening to the significant issues it faces with this changing landscape and a changing workforce, few will make dramatic changes in their talent model
- Given all of the above, there are too many law firms and too many lawyers
Is your firm embracing and proactively addressing these?
Most partners at law firms would say much has to be done, but cannot agree what should be done. Change does not come easy for this industry.
To start the process, ponder the following.
What type of law do you and your firm practice? What mix of clients do you have? Who buys your services? How strong are your relationships with them? Do your business arrangements with your clients reflect the value that you provide? How do you and your firm go to market? How is your firm organized? Is collaboration rewarded? How strong are your relationships with those within your firm? Does your firm nurture and develop talent to the future of the industry? Does it take risks and reward innovation? Does it truly reward those that are providing value at the leading edge into the future? Does your firm operate as effectively and cost efficiently as it can?
In future posts, I will explore the critical challenges facing law firms and corporate legal departments. Follow me on Bloomberg’s Big Law Business in my recurring column from Deloitte Consulting.
The views expressed in this column do not necessarily reflect the opinion of Big Law Business or its owners.