The Legal Update

Last week, we joined two different online events that tackled the impact of COVID-19 and the future of the legal profession from different angles. The first event, focused on law firms, featured Mark Cohen and Richard Susskind in a LegalGeek webinar, while the second was organised by Ari Kaplan with Bob Ambrogi as guest speaker in a relaxed lunch & learn format. What did we learn?

#1 Tech is every legal team’s best friend

It’s a fact: the legal workforce has become a remote workforce in the span of a week. All over the world, legal teams have had no choice but to adapt to lockdown restrictions forcing them out of office buildings. As Robert Ambrogi recently wrote, the speed at which lawyers were able to get up and running outside of their office was staggering with 90% of lawyers making the transition in a week or less and 46% in a day or less. For in-house legal teams already using Microsoft tools, Microsoft Teams has become the go-to meeting spot while others have jumped onto the Zoom or Google Meet bandwagon.

However, tech adoption hasn’t been equal everywhere with in-house legal teams leading the tech revolution and law firms lagging behind, despite claims to the contrary. As a general counsel said, “we’ve worked with legal clients for 25 years, and the gap in understanding remote working communication technology was already widening in the past 5 to 10 years. [The Covid crisis] has just sped up the mindset shift from those who were already starting to embrace technology. The shift has now moved from accepting that the tech is required to understanding how best to integrate it over the longer term with support.”

Whatever the tech solution, the number one take away from the crisis is that latent technologies already existed to collaborate in new ways and have enabled us to understand that traditional models are no longer necessary. Lawyers can work remotely in an integrated fashion. The nature of legal practice has changed to the extent that it could possibly be malpractice to not be technically capable, as tech access, data security, data movement, etc are all part of modern legal services.

#2 Medicine and law may have a lot more in common than previously thought

Ultimately, law is the business of knowledge, much like medicine is the business of health. Like lawyers, doctors were hit full force by the COVID-19 tsunami and remote medicine became the new normal but that is not where similarities stop. In an analogy with the medical sector, Ari Kaplan argues that the legal system needs to move on to a triage system where when you have a problem, you don’t start with a specialist. In medicine, you start with a GP and then move onwards. We might be headed to a legal ecosystem of tools that will help companies sort out more of their own issues, have access to more standardised processes and involve fewer lawyers doing the work.

For Mark Cohen too, the current legal business model is outdated and legal buyers have access to more information than ever before. In the future, law will be a marketplace where it won’t be about pedigree or brand or Oxbridge or Magic Circle but about competency, metrics of customer satisfaction and skills. Taken a step further, this model means that legal buyers will eventually not need legal practitioners to be licensed. Not all future practitioners will be certified lawyers and that is a good thing. If GCs are buying legal knowledge, do they need a qualified solicitor when a legal engineer can do the job as efficiently?

Inevitably, this will reshape the landscape of legal education and training. Up until 20 years ago, legal expertise was the only thing that lawyers needed to succeed. Today, lawyers need augmented skills such as project management, understanding of supply chains, basics of data management and analytics. Lawyers have to be able to read a balance sheet. In addition, they need to master the basics of technology and understand how tech is used in the legal marketplace.

The lawyers of tomorrow will be tech-enhanced multi-disciplinary advisers, which gives a big leg up to millennials and Gen Z who choose virtual environments wherever possible and who as digital natives, are already comfortable with tech
. As Mark Cohen once said, law is not about lawyers anymore but about legal professionals.

#3 Pricing, pricing, pricing

For law firms, the billable hour is the biggest part of the business model that needs to change. Robert Ambrogi went as far as saying that it’s the greatest obstacle to innovation in law firms as it’s founded on the premise of inefficiency.

  • Most participants agreed that restructuring fees would be an opportunity for tech-savvy lawyers who would be able to create digital offers and reach their clients more efficiently.
  • For the time-being, law firms should be putting out COVID-19 pricing or flat rates during hard times.
  • Past the COVID-19 crisis, lawyers would start charging based on the result delivered. If clients are charged for value delivered, it doesn’t matter where the work is done or how long it takes.
  • Others suggested rendering legal services by subscription as a way to offer “more for less” legal services.
  • For multi-month contracts, legal suppliers could offer a flat, monthly retainer that makes it easier to plan and budget for clients, while realigning the focus of suppliers on deliverables.

#4 Law is a buyer’s market

According to Mark Cohen, “consumers are now driving the legal bus and that will accelerate post-covid.” For a few years, GCs have already been experiencing the future of legal with the “doing more with less” challenge, adhering to budgets and considering where they buy their legal services. Until now, long relationships forged between traditional legal providers and companies have somewhat shaped legal buying but with stricter budget controls, clients will realise that they can get the same value from a range of different providers” ie Big 4, companies like Obelisk Support, managed service providers etc.

The COVID crisis is effectively empowering big corporations to set demands and we recently saw an example of that when BT announced to their legal panel that they would look at things like expertise, experience, culture, approach to innovation, and diversity and inclusion to select their legal suppliers. In incentivising the panel firms to adhere to the principles of a charter signed by the client, BT is forcing cultural changes within their supply chain.

#5 Metrics vs Values

Based on Mark Cohen’s observations on US law firm culture, metrics like profit-per-partner (PPP), profit origination are the measures of success and drivers of law firm culture. Law’s scorecard in how it treats its own profession is currently very low – including higher rates of suicide, divorce, drug abuse, and alcoholism than many other professions. Every metric of despair points to the fact that lawyers are doing well financially as a group but yet they’re not very happy.

Yet in the UK, pointed Richard Susskind, there is a growing concern about profit versus purpose. This COVID-19 period is a fundamental challenge to values. Law firms that responded in the first two weeks saying they cared about people and two weeks later, fired them, will have a problem. They’ll be seen as purely profit-making companies.

The virus has given us an opportunity to look at how legal services can be delivered differently and that is the greatest impact of the virus on the legal world. The crisis offers an opportunity to step back and contemplate what’s important to us, noting that it’s hard to change values as you move along. 
Sooner than later, vendor profiles won’t just include security profiles and corporate history. Clients will start asking about in-depth work from home measures, commitment to gender and diversity equality, as evidenced in the report Built to last? A blueprint for developing future-proof in-house teams.