A question mark looms over how the modern-day lawyer will navigate and survive increased commoditisation of legal services and the evolving legal landscape. The profession is experiencing disruption, and clients are the beneficiaries of more affordable legal services delivered efficiently.
We still recall images of the archetypal lawyer as a trusted advisor, the esteemed legal sage who guarded his or her knowledge of the law. This outdated version of a lawyer is evolving faster than practitioners know what to do about it.
The advent of fixed-fee billing brings a gradual but inevitable decline of the billable hour. Legal services are becoming automated, to the point where many firms are identifying themselves as “virtual” or “online”. The ever-growing cohort of law graduates is another unresolved issue, as firms scale back on their graduate intake and invest more money in new technologies aimed at increasing efficiency. While some firms are thriving in this new digital landscape and responding to the public’s mounting calls for price certainty and transparency in legal services, others are struggling to grapple with the reality – sticking their heads in the sand and refusing to accept times are changing.
So what are areas of legal services are evolving, and how can firms survive in this new and foreign environment?
A Brave New World
According to a report released by ALPMA and LexisNexis in 2014, legal services, not just in Australia, but globally, are irreversibly transforming, with creative new models for delivering legal services becoming increasingly more commonplace. Interestingly, the top areas for future investment, according to surveys conducted in the report, are technology, new ways of thinking and growth. To many, this isn’t surprising, but the question remains – what will this mean for legal practitioners now and in the future? Put another way, what will be expected of the modern-day lawyer to ensure his or her survival in today’s ruthlessly competitive and new age environment?
Investing in Tech
Nearly all firms ALPMA surveyed signalled their intentions to invest in new technologies including updating the website to be more intuitive and user-friendly. It could include looking at cloud-storage solutions aimed at improving the overall security and management of a firm’s data. Beyond that, many firms are looking at customer relationship management systems (CRMs), in a bid to better manage client relations and the overall client journey.
The technology revolution in legal services is already happening, according to Lachlan McKnight, CEO of LegalVision. He explained that as with any disruptive force, the tech revolution in law will negatively affect existing incumbents’ revenues and profits. Nimble startups are then better placed to capture the market share. He goes on to say that, “simple legal tasks which many sole practitioners have derived much of their revenue from will become more and more commoditised. Law firms will either have to choose to provide high-volume commoditised services, or highly bespoke services. Law firms stuck in the middle will be in trouble.”
Investing in Business Development
There’s no denying that useful legal information is becoming easier to find online. With Gen Y and Millenials having grown up with the Internet, firms can no longer price their services above the relative market value. Today clients have little trouble getting fixed-fee quotes from online firms, and have the freedom of basing their decision on price and service without leaving their home or setting foot into an office. Firms that have operated for decades on hourly billing are being forced to rethink their approach, and adapt to present-day price transparency. The key takeaway for mid and top-tier firms that are inherently less flexible than startups and boutiques, is to invest in more innovative growth strategies that not only acknowledge the new terms upon which clients and lawyers do business, but also embrace, anticipate and pre-empt the changes to come.
Investing in New Ways of Working
According to the ALPMA report, nearly half of the law firms surveyed reported that they are less than confident to adapt to changes in the new legal landscape, noting competition, price and technology as main areas of concern. The fixed-fee model, while not entirely novel, is becoming the norm, and small to mid-sized firms are slowly adapting. On the larger end of town, however, there is reluctance, perhaps even stubbornness to follow suit. ALPMA’s report reveals that less than one fifth of firms have changed their pricing model to accommodate the new demands voiced in the client marketplace.
While the overwhelming majority of large corporate clients are still reluctant to test the waters with smaller firms, more and more there is interest in the obvious appeal of the fixed-fee model. Part of what attracts these clients into these unchartered territories is the use of technology to meet new client expectations, particularly in regards to mobility. Clients are looking to access their case information and have the ability to manage it from their own client portal. If you haven’t already, investing into cloud technology might be worthwhile in the coming years.
Automation vs Attention to Detail
So what will the legal landscape of the future look like? Will automated document generators replace lawyers, or is there still space for the trusted legal advisor? The answer is yes, but without innovating your service to be more efficient, affordable and in touch with evolving client expectations, you can expect your bottom line to take a hit.
Where to From Here?
So while the traditional lawyer’s role is not entirely destitute, and certainly still has its place in today’s legal landscape, technology will continue to improve. Whether it will ever have the problem-solving capabilities of a lawyer is yet to be seen, but probably not.
The main takeaway here is to improve your service by investing in technology that will help you meet your client expectations. If the old way isn’t working, it’s time for change. If the hourly billing system your firm has relied on for decades no longer meets client expectations, it’s time to shift your approach, adapt to a new model, and compete.
What do you think? Tag us on Twitter @legalvision_au and let us know.