by David Kinnear
We are at an interesting inflection point for the legal sector. Two schools of thought speak to much of the change we see already – and it is indicative of what may lie ahead.
On the one hand, there are those who identify with a radically disrupted industry in which US regulatory frameworks (and the law firms governed by them) cede to alternative structures and external investment – and in which we attain a tech-enabled data nirvana of sorts. Buy-side and customer-facing technology features in this view. Some speak of a coming “Big Bang” and see this happening inside 5 years.
Their counterparts speak of a softer landing and a longer, slower adoption of change – a level of change that is easier to grasp and easier to implement over time – in which technology is mainly lawyer-centric, enabling and empowering the individual lawyer to do more, more efficiently. In this view, the profession remains the guiding star of the sector and it remains a profession-driven space. The timing is less clear, less consequential in this view – it plays out over 10 years or more. No question, technology is a core element but there is a more traditional view of buy-side behavior inherent in this.
Of course, it’s possible that neither is entirely correct and it would be easy to be wrong. There are competing principles here, that is “Change doesn’t happen overnight” versus “Google it”. Things have a habit of changing slowly yet we have quickly become used to using search engines like Google to find and acquire knowledge directly. Self-service has become the new societal default.
At such times, it’s important to observe buyer behavior very carefully and to heed some of the factors influencing it. It’s hard not to think that buyer behaviors won’t be influenced by visibility and awareness of options. After all, once you know there are options, why wouldn’t you be curious to at least explore them. Hitherto law has been a relatively difficult area for clients to navigate – questions abound as to how it works and what stuff costs – and why it costs so much etc.
Innovative technology and largescale pricing data initiatives make it decidedly easier for customers to break down costs and get an inside view of the business they’re placing. This isn’t lost on smart firms. Aside a focus on domain excellence and execution, many firms have made it a priority to get smarter on what they price, how they price it – and how they deliver it. This isn’t money for old rope talk. A smart buyer and a smart seller work well together – it’s a solid foundation for a long-term relationship. Each has an opportunity to be heard; each has the platform for assessing value. The bargain struck is more balanced.
Clients are smart and they’re getting smarter. Time and technology are on their side. The recent surge of interest in the corporate Legal Ops discipline should be a big clue that efficiency is a top-of-mind issue and will be for the foreseeable future. It is a new mandate and a new expectation.
As the legal department becomes increasingly viewed as part of the business line, not just a necessary adjunct, there is a fabulous opportunity for law firms and legal services businesses to step up as true partners. Legal departments are being asked to do more with less – and to make their case for budgets, investment with more granularity. They can be helped greatly in this process by willing and like-minded partners.
The best way to tackle a difficult subject is to understand it – and talk about it. Legal costs and expectations would seem to be a good example. We see some great conversations ahead and even stronger business relationships emerging as clients and their legal service providers engage around data, embrace change and realize the benefits of greater transparency in helping one another succeed.