The fifth annual Altman Weil Law Firms in Transition Survey was released recently. Law firm leaders in the US seem to be acutely aware of the changes that the profession is facing.
Some of the key findings of the survey:
1. Concerns that the demand for legal work is flat or shrinking in many practices.
2. Real pricing pressure from clients.
3. The competitive forces of commoditisation and the emergence of lower-priced, non-traditional service providers.
4. Aggressive growth in lawyer headcount may no longer make sense.
5. Pace of change is increasing.
As I was discussing with representatives of the legal services industry in Denmark last week – when supply fails to meet demand and when institutions begin to fail people learn to get what they need from each-other.
Jorma Vartia writes:
While the awareness of the need to change is good, the conservative nature of our industry can still be detected to a certain extent in these findings. Indeed, most firms appear to be reactive to external forces rather than proactive. Most are still making incremental changes within the framework of the existing business model, rather than pursuing opportunities to meaningfully differentiate their firms in the eyes of clients.
Recently I was asked about the case for innovation. What are the necessary conditions to invite transformational innovation? When an organisation, or industry, is faced with a set of circumstances that challenge its existing design, and way of operating which normally go hand in hand with its business model. And, when the traditional efforts to deal with those challenges are failing, then, there is a case for innovation. The means by which one can imagine, a better designed organisation, business or service overcoming those challenges, positioning the organization to become more resilient, whilst turning a fiction into a reality. And offering real value for commercial exchange, and, delivers to the collective good. That one can produce a superior product and service that disrupts and delivers exponential value to an entire industry, think Dyson, Apple, Amazon, Local Motors, crowd-funding or even the banking service Swift.
Our own research shows that many law firms in the UK are facing a bleak future, and yet we know that without the proper legal support, our economy which is powered by SMEs faces a challenging future.
In many industries across the whole economy disruption is happening at pace and technology allows disruption to happen at pace. But also we must be mindful that technology only succeeds when it meets fundamental human needs, and, when institutions fail, people learn to get what they need from each other. LawBite is challenging the whole legal profession to champion SMEs and the startup economy. MP Matthew Hancock and Minister at Business Innovation and Skills and Education described LawBite as a key enabler and a great example as an enabling tool for prosperity.