Yes, you can tell a roomful of millionaires their business model is wrong

David Maister is credited with rhetorically asking “How do you tell a roomful of millionaires they are wrong?”. Well now Mark Cohen reports he’s found a receptive room of lawyers in Singapore.

Singapore’s cityscape is a glimpse into the future, tinged with remnants of a bygone colonial age. Its buildings are tall, bold, and push the boundaries of architectural imagination. The postmodern Supreme Court building (pictured above) is emblematic of Singapore’s emergence as a regional dispute resolution and commercial legal business hub. The bold, efficient architecture and ubiquitous high-tech features reflect Singapore’s plans to become a key player in the emerging global legal community.

Beyond the gleaming buildings, efficient public services, and cutting-edge technology,Singaporeans are encouraged to embrace a sense of shared destiny and a desire to excel in whatever they do. They are welcoming, politely inquisitive, and introspectively global. Singaporeans are preparing for the future even as they are forging it.

How does Singapore’s legal community stack up to the lofty standards of the society it serves? The observations here are drawn from an intensive 10-day “residency period” that included 16 lectures and numerous consultations with key legal industry stakeholders. There were no guardrails and refreshing candor in my conversations with judges, regulators, academics, law students, legal business professionals, and lawyers from law firms and in-house legal departments. Here are some takeaways.

1. Judicial Activism of a Different Kind

 The Chief Justice of the Supreme Court of the Republic of Singapore (CJ), Sundaresh Menon, is a unique type of judicial activist. He has thrown the weight of his office, vast practice experience, business and technological acumen, persuasive skills, and personality into modernizing Singapore’s legal practice and bridging the gap between practice and the business of law. He is keenly aware that practice is shrinking while the legal industry that is subsuming it is expanding. CJ Menon is respectful that core practice precepts (attorney-client privilege, legal ethics, professional duty etc.) are preserved even as legal professionals with business and technological backgrounds are integrated into the delivery of legal services.

The Chief Justice has implemented a wide range of programs designed to meld the practice and business elements of law. This includes muscular, ongoing continuing professional development programs, technological adoption, and focus on access to justice- among many other initiatives. He is also exhorting his judicial colleagues to embrace digital transformation and to ensure the Judiciary is responsive to and aligned with the speed of business and the demands of society. Simply put, Chief Justice Menon is  keenly aware of the cultural reconfiguration that is  required to expedite the legal community’s adaptation to the digital and consumer-driven age. This awareness is being translated by a community of stakeholders including the Singapore Academy of Law, Law Society of Singapore and Singapore Corporate Counsel Association into programs and tools to equip the profession in its transformation.

2. Regulators Attuned to Stakeholders and The Marketplace

 Singapore’s legal regulators such as the Ministry of Law’s Legal Services Regulatory Authority and the Singapore Institute of Legal Education are mindful of the cultural clash between the profession and the industry-an expanded universe of legal professionals with new skillsets required to deliver legal services more accessibly, efficiently, predictably, and scalably. The regulators are sensitive to the concerns of each constituency and recognize that for reform to be successful, it must not decimate the existing legal ecosystem. The regulators have effected changes that promote competition, enable limited “outside” investment in law firms, and, most recently, reconfigure the traditional professional training regime for lawyers in Singapore. They are also keen to address the access to justice issues confronting the so-called “sandwich class”—the segment of the population between the super-rich and those qualifying for Government-provided legal services. It is here that there is space for re-regulation to facilitate an expansion of legal service delivery models – especially those that embrace technology, affordability and timeliness so that ‘retail’ law can be accessed readily, efficiently, and commensurate with the use-case. Translation: not all challenges require full-blown engagement of counsel.

 3. Law Firms Wrestling with Guild Culture

 Most law firms retain the guild characteristics of another time, but it is clear from my Singapore conversations with law firm leaders that  there is an awareness of a changing legal marketplace.  With homage to my friend Richard Susskind, you can tell a room full of millionaires that their economic model is in need of reconfiguration.

Corporate lawyers are aware of larger market forces affecting law, but most have yet to feel its economic consequences. That will change when the C-Suite demands “more with less” from its legal providers, both in-house and law firms —as is happening in the U.S., UK, and other large markets. In contrast, Singapore’s lawyers in the retail or “community law” sector are feeling the pinch. They receive lower fees for Government-subsidized clients than they once did, encounter elevated client expectations, and spend more time on administrative matters than ever before. They are working harder for less money and looking for answers. In sum, the retail market segment is increasingly detached from the guild. There is an urgency among practitioners to change but a frustration as to how. While technology can help ‘lighten up’ the administrative burden, a key challenge for this group is to tackle the pervasive zero-sum thinking which makes collaborative and alternative approaches to legal services delivery a difficult discussion to have.

Law firms—and that includes corporates as well as smaller firms targeting individuals and SME’s — are surprisingly conservative in their adoption of technology. One explanation is that IT is widely regarded as anathema to the brute-force labor approach that sustains the traditional pyramid that is the bedrock of the firm partnership model. Another is the law firm organizational structure where “equity” is profit-sharing that occurs at the end of each fiscal year or set number of years. There is no financial incentive for older lawyers on the cusp of retirement to leave money on the table and to reinvest in the firm’s future. This is, of course, nothing unique to Singapore. But it provides insight why law firms here adopt a measured approach to embracing technology, investing in tools, hiring high-level business professionals, and supporting re-training that would enhance operational sustainability, use data optimally for insights into  customer needs and satisfaction, and ideally result in optimizing long-term firm profitability.

Another common element among Singapore’s law firms—regardless of size or target market—is its male-dominated management, although the legal profession as a whole in Singapore is more equally distributed. Approximately 90% of the managing partner audiences attending my lectures were male. The lack of management diversity is not unique to Singapore but this is, perhaps, another reason why law firms, even those who exhibit willingness to change, run aground when thinking about how to effect such change. The guild culture defines success and talent in a distinctly patriarchal way with implications for diversity. If the firm can only conceive of what it does and why it does it in one way, then the possibilities for doing things differently and better are limited. Collaboration, empathy and user-centricity may be the unfortunate casualties of a guild culture hangover.

4. In-House Counsel Increasingly Calling the Shots

 The in-house community contrasts with law firms in several ways. Approximately 90% of those attending my in-house counsel lectures were women. Several attendees shared their feelings of “liberation” and preference for working in-house after launching their careers at law firms. The gender management disparity between firms and in-house is emblematic of many things: firms remain male-centric (a holdover from the guild); firm leadership is comprised of rainmakers and those that “inherit” clients from retiring partners (generally males); and firms generally accord little value to those who step off their treadmill of origination and high billable hours. Corporate lawyers, in contrast, function in a corporate environment, make decisions designed to advance both the short and longer-term interests of the organization, and are measured by efficiency, impact, and the dual role of enterprise defender and business partner. In the corporate world of in-house counsel, output is what matters, not imput. Unsurprisingly, in-house counsel tend to have a far superior grasp of the business, its DNA, politics, risk tolerance, competition, and speed of decision-making. In-house counsel are practicing in the industry while most law firms are toiling in the guild.

Curiously, in-house counsel indicated they are not much farther along than firms in adopting technology to streamline their services and/or management of outside counsel. Nor have most gone beyond the traditional binary pattern of sourcing work to firms or handling it in-house. There is little use of so-called “alternative legal providers” (read: non-law firm providers of legal services) except for the Big Four. This is destined to change, especially if/when regulators modify existing practice rules designed when law firms were the only game in town.

5. Legal Education, Training, and the “Skills Gap”

 There is growing awareness that “just knowing the law” is no longer a passport to a secure legal career. Legal educators were keen to inquire about post-graduate career opportunities apart from law firms. Likewise, there was considerable interest in what “new skills” they should be teaching as well as what faculty restructuring might be necessary to teach them. There is also considerable interest in how to “retrain” young and mid-career lawyers. That is a particular focus area of the Singapore Academy of Law and its Legal Industry Framework for Training & Education (“LIFTED”) program. LIFTED is a multi-faceted, multi-platform response to the “skills gap,” affording all levels of practitioners the opportunity to acquire knowledge, skills, and the agile mindset required in a rapidly changing legal marketplace. It is open to all members of the legal ecosystem, affording them a diverse, energized, and integrated community—domestic and international—to tap into. Among the many creative programs offered by LIFTED is a suite of future practice oriented ones which include a series of Architecture of Law modules dealing with subjects like deal design, legal entrepreneurship, and personal leadership. Concentrated, interactive, hands-on modules in project management, data analytics and personal branding are in the pipeline. For law firm leaders, the Singapore Academy of Law collaborates with INSEAD to run the annual Law Firm Leadership Programme.  This is emblematic of Singapore’s “learning for life” culture.

 6. The Future: Legal Cultural Reconfiguration and Consumer-Centricity

 Singapore is keenly aware that law—like the industries it serves—is undergoing rapidly accelerating change. Modern legal practice  requires considerably more than legal expertise. There is legal practice and the business of delivering legal services. Singapore, like other legal markets, is wrestling with reconciling the two for the benefit of legal consumers. The profession is loathe to initiate change in the absence of an economic need to do so. The Singapore Government and Judiciary —not buyers– are driving legal industry change. Singapore’s Committee of Future Economy Report identifies a reconfigured legal industry as part of a more integrated plan to advance the nation’s outsized influence on finance, fintech, and other knowledge-based industries. A modernized legal industry is a necessary element of Singapore’s economic and digital transformation and a key to its continued prosperity and stability. This is further evidence that the Government regards law as an element of the broader economy, not an “island.”

Conclusion

 Singapore’s legal industry—like other markets—lags the transformation and speed of its businesses. That’s changing. What is unique here is the “can-do/must-do” DNA of the society, the vision of the Government, the proactiveness of the Judiciary and the on-the-ground coordination of stakeholders provided by the Singapore Academy of Law. Singapore’s legal community is slowly but surely responding to exhortations to prepare for the future. The remarkable track record of this tiny but mighty nation suggests that following its journey will provide valuable lessons for getting it done and done well

Author 

Mark Cohen is a lawyer, law professor, legal innovator and strategist, and founder of Legal Mosaic. 

Mark says of himself “I write about changes in the global legal marketplace”.

Mark is a member of the Program Board and Teaching Faculty of the new Master in Legal Business that is being launched in early 2019 by the College of Law in Australia and New Zealand.

Mark’s article You Can Tell a Roomful of Millionaires Their Business Model is Wrong – Takeaways from Singapore was first published in Forbes on November 1, 2018.

For more on the legal services revolution in Singapore, read Mark’s Singapore: What Happens When A Nation State Endorses Legal Innovation?