As most of you know, this year’s ILTA conference is totally virtual. I don’t know whether it’s the outstanding content, the innovative approaches ILTA has rolled out or whether I’m just used to living virtually, but I’ve been impressed (more on this later).
Yesterday’s keynote (there is a keynote every morning) was a nuts and bolts discussion about law firms’ future. The presenter was Richard Punt, former CEO of Peerpoint. He has a long history in legal and is now the Chief Legal Strategist and Market Development for Thomson Reuters. He has a ringside seat to what is going on in the legal industry both for in house counsel and law firms. His predictions for the future due to the ongoing changes in the industry and COVID should cause many law firms to think long and hard about where they are and where they are going. (As I have discussed before, the leaders of many law firms don’t lower themselves to attend conferences like this, so how information like this filters up may in and of itself separate the sheep from the goats).
To jump ahead, Punt’s 6 predictions for the future due, in part to COVID:
1. The demand for legal services will be reshaped. Increased government intervention. Changes in company operating models. Changes in winners and losers in the business marketplace as we move to an increasingly virtual world and away from a physical one. All these changes, according to Punt, will reshape legal demand.
The Big Four see legal issues has only a small part of a business problem, not the tail that wags the dog
2. GCs will be expected to focus more on business outcomes and less on legal inputs. As I have pointed out before, here is where the big four accounting firms have a leg up: they see legal issues has only a small part of a business problem, not the tail that wags the dog. Because of COVID, says Punt, there is now a premium in house counsel being able to make quick decisions, on pivoting nimbly. There is related premium on the ability of GCs to correctly identify and determine what risks to take instead of avoiding them altogether. Law firms and their lawyers, on the other hand, have traditionally been the nay-sayers, have focused only on legal risks and have been notorious for identifying every conceivable risks and then leaving it to their clients to alone decide whether to take them. According to Punt, litigation and transactional work, which drive so much of law firm revenue, are, to clients only a means to an end, a view diametrically opposed to most law firm vision. Punt believes that the few firms that recognize this have a tremendous opportunity.
3. The practice of law will become more “codified.” Punt points out that businesses like the Big 4 and many consulting firms have extensive written protocols for how work is to be done and the methodologies to be followed. On the other hand, law firms carry much of this information in partners’ heads and resist the opportunity to codify this since it will interfere with the “art” of practicing law. But COVID has moved the workplace away from the physical office to remote locations. So, the training, development, and supervision used to occur in an office as partners imparted their wisdom from on high to underlyings will need to be replaced by a different, more codified model. At least for those firms committed to training, development, and supervision.
4. Platforms and data will drive transactions. Punt believes that increased reliance on data and platforms will lead to greater transparency among opposing sides in deals and transactional work. This transparency will enable the parties to see and understand what is really in issue and what isn’t. I daresay the same is true in litigation. What this means for many lawyers who make their billable hour quotas by fighting over anything and everything may be replaced by that small cadre of lawyers (with in house or with firms) who understand the value of data and the insights it brings. This will reduce conflict and the time needed to be spent in negotiations and litigation. Time that clients don’t want to pay for.
5. Justice will shift decisively online. As I have noted, the virtual world reduces the time litigants, judges and lawyers have to go to a physical place with all the inefficiencies that brings. Punt agrees, “a great deal of court business can be done virtually, eliminating inefficiencies.” Increase reliance on online, more automated dispute resolution techniques will likewise reduce costs and the need for lawyers, noted Punt. The firms that realize this will be winners. Those that prepare for persuading virtually will have more success in the new world.
Work-life balance may become more critical, and the ability for lawyers to have more control and autonomy in their lives will be paramount
6. There will be a new social contract with legal talent. Punt says COVID has focused on the end of the physical office and its reliance on set schedules and hours. Lawyers new realize that they can not only work anywhere, but they can also often work anytime. This idea will says Punt, means that work-life balance may become more critical, and the ability for lawyers to have more control and autonomy in their lives will be paramount. Relatedly, the demands for greater diversity and the end of gender discrimination now have added importance and in getting and retaining the talent that can respond to the new marketplace. Punt thinks reframing the social contract is a “top priority for law firms.”
What’s The So What?
Punt believes, as do I, that the firms and lawyers that recognize these changes, many of which were already slowly occurring, will thrive. Those that don’t, won’t. As Punt pointed out, the demand for legal services for the top law firms, say the AmLaw 50, has been strong over the last ten years and is still strong. But for many mid-size firms, demand has been flat or even decreased during the same period. The same is true for the past quarter.
Many mid-size firms have not seen or have chosen not to see the changes that have slowly occurred in the legal landscape.
The critical question is why and what the “why” holds for the future. I think its because many of these mid-size firms have not seen or have chosen not to see the changes that have slowly occurred in the legal landscape. The fact that these changes, many of which Punt so articulately identified in his keynote, will now accelerate. Those firms that believe that all this COVID nonsense will end soon and things will go back to normal may find themselves in a very strange new world. A scary new world they will not like much.