7/21/14

Whither Change?

Image [cc] Moyan Brenn
Three posts recently caught my eye. One was on the imminent demise of BigLaw. The other was on how small firms are about to have their day. In the third one Thomas Sager, the GC for Dupont takes GCs to task for not pushing hard for change from outside counsel. In his words, "Until that happens, I don't know how you are going to beat this."

Right ... on all accounts?

The impending doom and demise of BigLaw is getting to be a very old story. Old enough, we should all be asking; So when is this actually going to happen?

The rise of small law post brought back memories. In my bar association days I used to bring up this topic. Although I didn't predict any rise. Instead I would suggest to small firm  lawyers they have an advantage over large firms when it comes to adopting change. They don't have to form a 20 member task force to study an issue for 18 months, then make a recommendation that is too late and going to be ignored. However, the reality of small firms is that they are also owned by lawyers. And hence, they have no interest in change. They "just want to practice law."

The article on Sager actually hit a note with me. I fully agree that clients are not really pushing firms to change. They are pushing instead for discounts. Discounts aren't really a change driver.What sort of change do discounts motivate with outside counsel? I actually asked this question to an audience of in-house counsel in a presentation recently. After thinking about it, most people there shrugged their shoulders and said "not much." One finally raised her hand and said "It motivates firms to raise their rates." She may be right. But the bottom line is discounts do not drive changes in the way legal services are delivered.

So adding these three thoughts together, lead to one of my infamous epiphanies. My mind drifted to patent litigation, as it often does. What will drive change in this type of service? Other than some incremental, marginal changes, to really change this practice the courts would have to change the way patent cases are litigated. Chance of this happening: Approaching Zero. What about deal work? Somehow we would have to restructure due diligence, negotiation and documentation for all deals. Right.

This all brings Jeff Carr's comment to my recent post to mind about "complexifying" legal services. Most legal services are built on known models - which are complex. A number of years back an attempt was made to simplify litigation using arbitration. This just created a new subset of complexity. Even at the low end of the litigation market - try getting a divorce. Unless it's uncontested, you will enjoy the complexified experience of the US court system.

So what's my point? BigLaw may suffer on the edges (ala Patton Boggs), but clients still need their services. Small Law can't or won't step into the breach (except in certain circumstances). And LPO's will continue to nibble at the edges, but are not apparently taking away large portions of legal work from large firms. So the Big Disruption seems unlikely any time soon.

I think Sager is right. But I am also bearish on the idea of clients embracing change at that level. That side of the market is just now fully embracing e-billing. This might give them better data, but it doesn't really change their operations. Maybe if we see in-house legal teams dramatically change in structure that will be the sign that Armageddon is upon us. But I will point out (again) these teams are made up of lawyers. I suppose they have more immediate pressures to save money, but I'm not seeing the kind of direct pressure Sager notes bearing down on them to actually change.

Of course I could be wrong. Or maybe I am just impatient.

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2 comments:

Ann Lee Gibson said...

I keep mentioning in polite company that all this DisruptLaw stuff is old hat. (The kids just stare at me.)

If anyone bothered to look at DuPont's Legal Model (published in 1992), it describes the impact on productivity of rate reductions. Guess what? Productivity declines. Duh.

So what does work? In 1992, DuPont urged the following changes to improve productivity:

* Law firm convergence
* Applied technology
* Work process reengineering
* Performance measurements
* Value-based billing
* Risk/reward sharing

Some clients and some firms have been working on these night moves for 22 years. And other clients and other firms have been doing ... actually, I don't know what they've been doing.

This stuff is not rocket science. It is the most basic common sense in the world. If you can find a way to do a job cheaper, better and faster, then do it cheaper, better and faster.

Duh.

Julian Summerhayes said...

As a former solicitor in private practice who now speaks widely on digital in the legal space, it pains me to keep reading the same stuff over and over with so little, if any, input from the profession or the client cohort that the firm is supposed to serve (badly?). Even when people do decide to post--I'm thinking of the Law Society Gazette or The Lawyer--they do so anonymously! The profession has a long long way to go not just in the changes it needs/must make, but in adopting, in broad terms, a more entrepreneurial mind-set. It might sound a bit naff but they could do worse to read something like the E-Myth Revisited or In Search of Excellence. Perhaps then they might get an idea of what it means to go to work on the business and not in it. Thanks for sharing. Julian.

 

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