3/17/11

Elephant Post: Will “Change” Kill More Law Firms This Year?

Between last Thursday's Elephant Post and today, the BigLaw firm of Howrey ceased to exist. In talking with some of the people at the local Houston Association of Litigation Support Managers (HALSM) yesterday, I heard the local office of Howrey changed all of the computers, telephones, login, and email accounts overnight to Winston and Strawn. It's amazing how quickly firms can change after something blows up… but how slow they tend to be in adapting to changes in the way they conduct day-to-day operations.
So, as we bow our heads and remember what was Howrey… we ask to predict if this was a one-off situation, or if we should be expecting "change" to bite a few more firms in the next few months.
Next week, we escape the macabre topic of dead law firms and get back to asking simple technology questions of what programs do you use that you really wish you didn't have to.

Toby Brown
AFA/KM
The most telling thing I read from the Howrey implosion came in this quote from the CEO: “What we found is that partners at major law firms have very little tolerance for change and very little tolerance for fluctuation in profits.”
This quote describes the situation in every firm I have ever dealt with.  Lawyers have this unrealistic expectation that they can keep doing things the same way (with some minor, tolerable adjustments) AND continue to get paid the same way.  Cost cutting measures have bought them some time, but time is running out on that effect.
I'll more more surprised if "Change" doesn't kill more firms.


Greg Lambert
Law Librarian
I just read where Jon Bon Jovi said that Steve Jobs and iTunes killed the music business and thought that this sure sounded a lot like how alternative fees and outsourced e-discovery killed Howrey. Times change, people change, business models change, and if you don't understand that, then you will get left behind.
There are many firms that don't understand that… They think that 2008-2010 was just a dip in the road, and not a fork in the road. As I've heard many times before, however, it is hard to tell millionaires they are doing something wrong. But, there were probably a lot of millionaires at Howrey.


Brian Rogers
Lawyer
It's hard to see how law firms can avoid being affected by "change." My sense is that most industries have done a better job than law firms of reacting to competive pressures by engaging in strategies such as adopting technology, rationalizing pricing models, and incentivizing desired employee behavior. As a result, two new categories competitors are quickly moving into our market: non-law firm vendors and our clients (vendors by doing things that lawyers have traditionally done and clients by pulling more work in-house). If the two combine effectively, the results could be disruptive to law firm business models.


David Whelan
Information Pro
Change will continue to impact larger law firms but not necessarily kill them.  I think we are coming to the end of law firms failing and floundering due to change catalyzed by the financial crisis.  But other change, like outsourcing core functions and the ongoing absorption of large regional firms by mega global firms will mean there will be fewer firms.  Solos and small firms will continue to adapt to change - increasingly cloud-based, SaaS technology, increased numbers due to large law firm departures and new graduates, greater expectation for specialization - but I don't think it will kill them either.

Next Week's Elephant Post Question:
What Software do you use in your firm that you really wish you didn't have to (or you wish the developers would make easier/better)?
I was talking with Kingsley Martin this week about extracting text from PDF documents when he mentioned that law firms have locked in many of their documents into this platform with no really good way to extract that data cleanly if they need to do so later. He noted that this will eventually catch up to these firms and they'll pay a price for relying so heavily on a proprietary software without thinking of what will need to be done with that data at a point down the road.
So, taking Kingsley's advice that this topic would make a great Elephant Post, we're now turning the question to you. I'm pretty sure that anything in the "Microsoft Office Suite" would make the list. How about any other programs you have to deal with at work? Anything you'd like to erase from your desktop but can't because it's the "standard" at your firm and you're required to use it?


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