Remaking News of the Week: Traditional law firms must adapt or die

Legal Futures recently headlined Traditional law firms must adapt or die, tech GCs warn. 

The interview reported the use of what some might call melodramatic language, like ‘inertia’, ‘still stacking meetings with lawyers’, ‘unless BigLaw adapts to the way agile providers are doing things, they’re on their death bed’ and ‘they need to change their (business) model’.

The GCs head the legal functions in Monzo, Transferwise and Revolut– all tech companies. They are exposed on a daily basis to tech- and business model-based innovation in the early stages of the life cycle. As such, their voices are portents for BigLaw.

The GCs were speaking at a roundtable in London organised by global lawyer-matching service Lexoo, so chances are they are favourably disposed to new ways of sourcing and operating legal services. In my opinion, this doesn’t diminish their message for BigLaw leaders.

A view was expressed ‘that it would take 10-15 years for old school law to die’; I agree. In 2016 with Ross Dawson, I published the first, and still only to my knowledge, Delphi forecast on traditional BigLaw business law firms share of the legal services supply chain out beyond 2025. The data suggested this share would would shrink from 70% to 30% after 2025 in England & Wales. The full analysis and conclusioms is published here.

Ross and I based our conclusion the Delphi data and the megatrends in the industry:

• “Hyper-competition. Hyper-competition will cause changes in industry structure, including clearer delineation of strategic groups and proliferation in the number and type of legal services providers, and intensifying supply-side competitive dynamics.
• De-regulation. De-regulation will progressively reduce, even remove, restrictions on almost all aspects of the ownership of providers and the ways in which legal services are delivered.
• Client transformation. The speed and intensity with which clients transform the ways in which they meet their legal needs will occur more rapidly than most anticipate.
• Exponential technology. The impact of technology as a substitute, not just a complement, for lawyers’ services will be more dramatic than most predict.
• BigLaw firm inertia. In the main BigLaw firms will be slow to develop the capabilities in change management and innovation that are needed to remain profitable in the conditions expected after 2025.”

All this said, our data also suggested that after 2025, 25% of services would be supplied by ‘Remade’ BigLaw business model firms. In the few years since we published our report, evidence has been accumulating that, at least, in regions like England & Wales, this forecast is roughly correct.

I look forward to welcoming Daniel van Binsbergen, chief executive of Lexoo, to the Dialogue as a Q&A discussant in the not-too-distant future.