How ‘old law’ can adapt to the threat of alternative legal services providers (Part 1)

Our series ‘Why alternative legal services providers are so attractive’ offered two critical conclusions about the threats facing ‘old law’:

1.     Overreliance on leverage, poor matter resourcing decisions and overcharging is creating dissatisfaction with the status quo, which ‘new law’ businesses can provide a solution for (Part 1); and

2.     Clients are responding to misconceived notions of great client service and ‘commerciality’ by abandoning ‘personality driven’ old law firms and instead instructing outcome-specific alternative legal services providers (Part 2).

Lawyers aren’t known for being entrepreneurial risk-takers. That needs to change. In this article we offer some suggestions for how ‘old law’ firms can adapt and, importantly, how these insulate firms from new law start-ups. And I don’t just mean completing exactly the same work for exactly the same clients with fewer overhead costs.

Chargeable legal project management

I’ve previously argued that client purchasing decisions are changing to specific, outcome-based, services offered at a fixed price.

This new law solution isn’t, however, practical for all clients. Instructors must have sufficient expertise to first identify what services are required, and the capability to manage large teams of alternative legal services providers each providing specialist input.

‘Old law’ has significant expertise in both. And there’s significant scope for lawyers to be involved in real legal project management by:

  • becoming involved early in client projects and matters by scoping all required legal services;
  • identifying and instructing particular alternative legal services providers and suitable automation technologies, managing their workflows and deliverables as required; and
  • assisting with the implementation of the project on client premises.

Firms are already involved in each of these steps to some degree. But with firms’ primary focus on completing all legal work in-house, a critical challenge for ‘old law’ is balancing what should be done in-house, and what should be outsourced.

Old law can’t compete on price. Premiums for reputation and service will continue to erode. Only those firms best able to adapt will survive.

Sell solutions

Actual recommendations from a lawyer are rare. Everyone loves giving options. Clients are just left to make a ‘commercial decision’. Truly evaluating legal options ‘commercially’ requires legal expertise – do clients really need lawyers if they already have that expertise? Fence-sitting lawyers don’t make for great client service or happy clients.

For lawyers willing to really be ‘commercial’, I think there’s enormous opportunity. Become legally-trained management consultants. Shift perceptions from compliance cost centre to profit centre. To stay relevant, the legal profession needs to be moving towards:

  • having a ‘best solution’ and concrete recommendations in every matter; and
  • actively assisting the client with the implementation and execution of the recommendation.

Maybe then clients will start paying on time and in full.

This isn’t as simple as identifying a need to “move further up the value chain” as many firms have already done. And it is fundamentally different to the ‘one-stop-shop’ model large law firms are clinging to. These are the lawyers most at threat from technology-driven disruption.

To make real change, lawyers need to keep caring once their advice or report is delivered. Less cynically, this new approach is about recommendations, implementation, execution and management – not ‘pure’ legal services like writing an advice or a comprehensive due diligence report. All of that will begin to be done by alternative legal services providers.

Further Reading

We will shortly publish Part 2 in our series, which offers some technology-specific suggestions on how lawyers might adapt their practices to respond to the threat of ‘new law’. In the interim, there’s a range of excellent resources to consider:

You can read our short reviews of these books here.