5 Key Observations on Law’s Tectonic Shifts

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By Edge International | May 30, 2014

Firms ignore these significant changes to the law-practice environment at their own risk.

Any development that changes the rules and renders present practices obsolete is called a “destructive trend,” that is, something that utterly destroys the present way we think and do things, something that threatens to quickly alter the status quo. Over and again in our recent consulting engagements — particularly with large firms, where trends tend to start — we’re seeing signals that the legal profession is caught in the confluence of destructive trends:

  • Firms have too many Income and Equity partners, and this is a major problem because client demand remains down and clients now have a rapidly-growing number of excellent — and cost effective — alternative sources of legal work. Firms are top-heavy, they know they are top-heavy, and they’re not doing enough about it.
  • Half of what lawyers do now will soon be accomplished by technology or alternative (i.e., non-lawyer) providers for a fraction of what firms are charging clients. Technology is changing everything. Routine work will soon be delegated to technology platforms and solutions. Incredibly sophisticated algorithms and expert systems will snap up commoditizable tasks so fast it’s going to make managing partners’ heads spin. GCs already are using Neota Logic and Kiiac to accomplish work that used to go to law firm lawyers.
  • Clients are denouncing and resisting rate increases. The growing strength of the forces of the buyers’ market mean that firms are discounting to try to hold market share and clients are squeezing in the sure knowledge that almost all firms will concede lower prices. Innovative alternative fee arrangements make legal headlines daily. Corporate counsel looking for truly efficient legal services are calling Axiom, Clearspire, Project Counsel and other non-traditional tamperers of the legal service delivery paradigm.
  • Associate loyalty has vanished, and most associates are flight risks. Unless an associate is a gifted natural rainmaker/BD whiz, s/he knows it’s going to be nearly impossible to make equity partner. Associates, hyper-specialized and increasingly undertrained as professional development budgets are slashed, know that they are at risk in a competitive market place. And law schools are compounding the labor glut by pumping out 44,000 grads each year for only about 21,000 jobs. In such a jammed marketplace, associates will jump at any opportunity that looks better and safer, or that provides more career leverage.
  • Supportive firm cultures are a dying breed. “Eat what you kill (or bill)” simply is not a recipe for collegial sharing. Today’s tightening economic pressure on partners to deliver revenue and clients have obliterated incentives for collaboration. Millennials are checking out because they see that partners don’t walk the culture talk. Gen Xers are not invested in firm culture because they have never been invested in any collective identity. And while senior lawyers lament today’s erosion of the bonds of fraternity, they are realizing that it’s hard to be collegial when the successor generation wants to push you outside the igloo to freeze.

We are convinced that the changes we’re seeing really are harbingers of inexorable and large scale destructive trends. Yet, we frequently are likened to Chicken Little in our efforts to awaken a sleepy profession to the trends that are fundamentally transforming its topography and economics. We get pushback from lawyers complacently ignoring temblors and tectonic rumblings (“Well, we had quite a nice 2013, thank you very much”). Perhaps the profession’s impending paradigm shifts have not yet hit these nay-sayers full force, but the signals are clear. Okay, maybe the sky isn’t falling, but no doubt about it: the ground certainly is shifting.