Law firms and qualified lawyers are consistently held out to be resistant to change and stuck in the past, playing the same old game to clients who are increasingly wise to alternative cheaper or more effective legal service options.
This has already changed how legal services are provided – in the UK there are now at least as many non-regulated persons delivering legal services as there are solicitors. In the US, alternative legal service providers are used by more than half of corporate legal teams.
So the greatest issue for us today is not what’s happening in front of us, it’s what we don’t see – why our potential clients go to unregulated/alternative providers or do not seek formal legal advice at all.
We’re busy, so why worry?
I haven’t worked with lawyers who aren’t rushed off their feet since 2003 (long story for another day) but the surveys tell us that we’re only seeing the tip of the iceberg – why do only 1 in 10 people with legal problems seek advice from a solicitor or barrister? Commonly blamed factors include high costs, incomprehensible advice, unfamiliarity on how lawyers assist their clients, and a preference to approach familiar trusted people such as a teacher or a religious leader. Plus of course, we can always use google to find the answer for for free.
Perhaps the greatest barrier to accessing legal services is caused by negative opinions about lawyers and legal services. This may be due to personal experience, perceptions of lawyer’s personalities and working practices, and bad reviews circulated by word of mouth and increasingly Google.
What about the competition? The regulated legal market is competitive enough, but the real broadside is coming from unregulated providers.
If 25 to 50 % of law firms work is squarely under attack by cheaper alternative legal service providers and many of our remaining potential clientele are either disillusioned with qualified lawyers or would rather google their way out of trouble, we can see why traditional law firms are not expected to fare well over the next few years.
What prevents innovation and reform at law firms?
In summary: Partners, overheads, tradition and economic stability.
Ageing white male Partners are quick to be held up, shamed and blamed; a cynical breed who are ignorant of their clients needs, reluctant to use new technology, to recruit a diverse workforce, to support young lawyers, and to relinquish their hold on drawing down maximum profits instead of investing in the future. So will short term gain for high equity earnings = long term pain?
Law firms are tied into their repetition of has-been same old service delivery methodology through the shackles of hefty overheads including premises, wages, and increasingly compliance, IT and marketing costs. With so many bills so pay, there isn’t sufficient let up on billing targets to consider market challenges and the costs of reform.
There’s less incentive to change when business is booming: The UK has the largest legal market in Europe, which is continuing to grow. US law firms employ 1.35 million and are also seeing year on year growth. Why should law firms established for 50 to 100+ years change now when things are ticking along nicely thanks and Equity Partner’s annual earnings at top 50 law firms exceed £300,000?
Could smaller law firms innovate our way to success?
With traditional Partnership mid and larger sized law firms being unwieldy beasts to drive forward business change and modernisation, is the path clear for smaller firms to run circles around the big players and capitalise on new technology and consumer trends in accessing services directly online?
Being a leader in the field of legal service delivery no longer equates to having the best firm and lawyer ratings in Chambers & Partners, a visually pleasing website and Central Business District premises.
Shop front law firms are higher risk because if the consumer demand for your service is reducing (see above) there won’t be enough walk-in customers off the Street to justify the high rent and the cost of furnishing meeting rooms and a plush reception area.
Over the past ten years business has come to the consumer, not visa versa. If your client can be visited at their own home, in their office or if we can serve them online, that’s convenient to our clients and increasingly meets their expectations.
Are Partners at traditional law firms oblivious to what lies ahead and the changes needed to provide cheaper and more convenient legal services? Definitely not. Given the right conditions many will move quickly to effect change, and most regulated legal service providers say they are ready for a more innovative and dynamic market.
In England & Wales the SRA are looking at significant regulatory change which could favour more innovative means of providing legal services – remote working, international reach and mobility, online service delivery, automation; all which could and should make innovation and change easier and will ultimately benefit the consumer and evader of current traditional legal services.
Can the regulated sector meet consumer expectations head on?
Both business and individual clients now expect more; a strong and genuine personal relationship, commercial awareness, and added value services such as training sessions and updates. They may not seek some of the expensive trappings of our past such as shop fronts, central offices and hourly rate charging.
The good news is: There has never been a better time to meet changes in consumer expectations and demands through innovation. Smaller start up law firms are very well placed to drop the traditional law firm model, loose the big overheads, and squarely meet the new challenges of the modern legal services market.
Comments and discussion on innovation and law firms are welcome.
High Street image: SuzanneKn at English Wikipedia [Public domain], via Wikimedia Commons
Gorilla image: By LBKlocal – Own work, CC BY-SA 3.0,