Canadian Lawyer – Why law firms can’t compete
Law firms are failing. They are failing society and clients by not providing accessible and affordable legal services and by offering the wrong services. They are failing their internal stakeholders by assuming only senior lawyers contribute to law firm success.
These shortcomings can’t be easily fixed with the latest technology or management practice trend. Instead, the future success of law firms requires a shift from short-term thinking to long-term thinking. This means rewiring two key components of law firm DNA — the partnership structure and law firm regulation — and adopting an employee-owned corporate structure that allows non-lawyer employees an ownership stake. This type of innovation is profoundly more important than any app, open office design or project management tool, and requires us to come together as a profession to effect change.
As a profession, we spend a lot of time wringing our hands (and writing) about the rise of our competitors, the growth of in-house capacity, the threat of automation, the success of big accounting firms and the rise of artificial intelligence. Yet we are not responding because, as many legal futurists (like Jordan Furlong) and academics (like Jonathan Molot) have pointed out, to do so requires long-term thinking — but law firms are driven to pursue short-term rewards.
All of this points to a clear path. Law firms must restructure as sustainable long-term businesses that can attract and retain the right kind of talent for the emerging legal market. To do this requires two things: changing our corporate business model to promote long-term thinking and changing our regulation to allow us to compete for and motivate the right kind of talent.
The American Lawyer – Mimicking Clients, Barnes & Thornburg Launches Legal Ops Department
The Am Law 100 firm is launching a “legal operations department,” mimicking language that has been used on the in-house side to describe a suite of efficiency-focused services such as budgeting, project management and technology-supported legal work. The term has been popularized by the rise of CLOC, the Corporate Legal Operations Consortium.
The name represents an effort to more broadly integrate the use of legal operations skills across the entire firm, such as bringing specialized pricing staff into client meetings.
Law firms have used a menagerie of terms and titles to indicate they are trying to work more efficiently: Appointing pricing directors, chief innovation officers and chief value officers, for example.
But a growing list of firms are embracing the “legal operations” tag.
Scaling up the use of efficiency-focused disciplines such as legal project management is a challenge that many law firms have faced after finding pockets of success. Those challenges are not strictly internal to law firms.
Lawyers Weekly – Time-based billing helps firms be more profitable
Despite movement away from billable hours from segments of the legal profession, new research has indicated that law firms that bill at least half of their work by the hour continue to show higher profitability.
But only a quarter of the firms surveyed said that they track profitability at the client level, and those firms that did not track employee time at all reported having the lowest levels of profitability of those surveyed.
“What we are seeing is that firms that pay attention to how much time is spent on work seem to have a better grip on the impact on staff utilisation, financial performance and scope creep”.
“Over the past four or five years, there’s been a shift by some firms to fixed fee or value-based billing and away from tracking time, and that clearly has an impact on the flexibility you can offer the clients.”
The survey also showed that the most profitable firms had four characteristics “driven by a clear understanding of the time their professional staff spent on clients”: they measured and tracked lawyer hours, they billed predominantly but not exclusively on time, they were able to use time tracking to measure WIP, and they had enough insight into time spent to be able to keep write-off rates below 5 per cent.
Canadian Lawyer – The state of legal tech
Thomson Reuters research, meanwhile, reveals a five-year 484-per-cent increase in global patent filings for new legal tech, with the U.S. and China among the most prolific applicants.
LawGeex vice president of marketing Shmuli Goldberg says that despite the industry’s apparently “explosive” growth, it remains “very early days” for the legal tech industry due to lawyers’ low adoption levels.
Toronto-based lawyer Mitch Kowalski — a professor of legal service innovation at the University of Calgary Law School and author of the book Avoiding Extinction: Reimagining Legal Services for the 21st Century — is bearish by comparison. He says legal tech remains stuck in “hype mode” in a “bubble that will burst and taint the entire sector.”
“Just like the fog of war, there seems to be a lot going on out there with legal tech, but it’s becoming more and more difficult to keep up with all the players. Like the dot.com boom, it has become nearly impossible to sort out what’s real and what’s just good marketing.”
Yet it’s cloud computing — and the legal operations-related opportunities it’s enabling — that dominated the more than 20 interviews Canadian Lawyer did for this story with legal tech lawyers, leaders, academics, techies and commentators.
“[T]wo or four years ago, some purchasers still avoided the cloud and treated it as a fad,” nowadays, the legal services industry regards it as “inevitable.”
“A few years ago, the prevailing wisdom was that the most secure solutions were on private clouds. That’s no longer the case, given the massive investments being made by companies like Microsoft[.]”
Kira, with 130 employees and five of the biggest Bay Street law firms as clients, attracted US$50 million in its first external funding round in 2018 — by far one of the largest legal tech rounds to date.