BigLaw will remain and flourish

“The Death of Big Law” is a phrase often used as a vague notion or as hyperbole to fill event rosters and sell books. While the idea’s first mention by the late Professor Larry Ribstein in 2009 did not have such a commercial purpose, his general concept has been manipulated to suggest, or downright predict, the inevitable erosion and failure of the entire large law firm sector.

Rather, the original hypothesis was, and remains, that BigLaw as it stands today (or as it was in 2009) is ill-suited for the new economy and will thus ultimately struggle to regain what it had prior to the Great Recession. [In Joshua’s article I have taken the liberty of eliding ‘Big Law’ into ‘BigLaw‘. The latter form connotes the business model that underpins – and is the cause of – many of the challenges faced by law firms that rely on the dynamics of the model as it currently operates. Editor]

While many law firms and professional service firms are entering a challenging time, the BigLaw market itself will remain and flourish, driven by the increased complexity that corporations face and by those BigLaw firms that use their resilient and adaptable business models to serve the unmet and changing needs of corporate buyers. We are indeed on the front-end of sweeping change but it will not come from robots or other technology replacing lawyers and the like. And it will not happen quickly.

To understand the fallacy of BigLaw’s supposed “death,” one must appreciate both the market in which Big Law exists as well as the business models that have been designed to support that market. Large law firms get labelled as slow, stupid, misdirected and the like all the time. While we may have some examples of this from time to time, the underlying structure of a law firm allows it to be nimble, agile, and proactive.

They are learning. They are planning.
And they are certainly not dying.

Is change management involved? Of course. But small, smart bets build to bigger, smarter bets. Many large law firms are taking more and more small bets right now. They are learning. They are planning. And they are certainly not dying.

You can save your epitaphs. Here’s why.

The Market

One fallacy is that there is one singular BigLaw market. There are, in fact, hundreds of markets and segments. The buyers of legal services within these markets range broadly as well.

Consider the labor and employment (L&E) legal market: within this market are customer segments with different needs and buying preferences. L&E counselling work, for instance, is provided not just to in-house lawyers but to HR professionals or CEOs of smaller companies. The companies range from small-box retail to global manufacturing firms to consumer product brands.

Each of these segments buys differently and for different reasons. They also have a wide degree of expectations for how legal services should be delivered. This means that the role of technology, new providers, alternative providers and insourcing varies greatly. While some large law firms struggle to address the unique needs and preferences of these various segments, the smart ones are adapting their business to “play” in each of these market sectors.

While this is not the most radical example, the shift many firms have made from focusing on practice area to focusing on industry shows an ability to move closer to the specific client cluster in a more meaningful way. This is evidence of a market-focused approach rather than a product/service approach. It means law firms recognize there are many markets in which they operate.

The Business Model

A second fallacy of the death mantra is that there is one singular BigLaw business model. Evangelists of the death movement fail to study the intricacies of different law firms. Too often a business model is described as either traditional or non-traditional – about as non-specific as you can get. If someone truly wants to impress, perhaps they take on the Swiss Verein structure in an attempt to approach the business model discussion.

All of this discussion is folly and unhelpful.

The “business model” of any law firm actually consists of the individual business models that it operates in addressing different client segments and/or common industry problems. Each firm has different practice groups that speak to unique client problems, provide a unique value proposition, have different client engagement strategies, use technology and talent staffing differently, and so on. This portfolio of business models provides large firms the versatility to adjust to changing market conditions based on individual markets.

Smart firms take a balanced portfolio approach to managing their business models – investing where the need is, turning away of declining or marginalized areas, testing new approaches and otherwise pivoting to ensure growth. Sure, most managing partners may not express it this way. And yes, there are too many firms lacking the leadership and awareness to even look at the challenge in this manner. But there are many who are and will continue to. I am at such a firm. If BigLaw was dying, I – a tech-savvy, design-driven entrepreneur – would not have joined.

Author

As the Chief Strategy Officer at Seyfarth Shaw, Josh leads market-driven development and growth initiatives for the entire Seyfarth Family. He leads Strategy & Innovation Performance, Marketing, Business Development, Pricing, Research & Intelligence, Lean Solutions, and Business Design.

Acknowledgements

BigLaw will remain and flourish was first published in the Ontario Bar Association’s JUST. ‘Debatable’ column on June 17, 2016. Dialogue is grateful to our friend Joshua Kubicki, JUST. and the Managing Editor, Catherine Brennan for permission to republish this noteworthy opinion on the future of BigLaw.

I also thank Ken Grady and Lisa Damon, members of Seyfarth Shaw, for their contributions to Remaking Law Firms: Why & How. Ken and Lisa are among the 40 contributors from around the world who generously shared their opinions with the beaton research team in the preparation of Remaking Law Firms: Why & How.