I’m in the business of improving the efficiency of legal services. I spend a lot of time with corporate legal departments and with law firm partners and managers looking for ways to deliver legal services more cost effectively. I’ve been doing it for a long time and I like to think that my track record speaks for itself.
I have met more than my fair share of legal leaders that didn’t believe the words ‘legal’ and ‘efficiency’ belong in the same sentence. Likewise, I have met many pioneering legal-efficiency thinkers and practitioners. In the circles I run in, it’s rather fashionable to predict the demise of Big Law, so I woke up last week to an inbox filled with emails about the New Republic article The Last Days of Big Law – You can’t imagine the terror when the money dries up by Noam Scheiber. The “crisis in the profession” is illustrated through the journalistic device of writing an episode of Mad Men, but replacing the fictional ad firm Sterling Cooper with the real-life law firm Mayer Brown. It’s actually quite a fun piece and worth reading. And we all know that there is some truth to it. As Kent Zimmermann wrote in his piece Law Firm Leaders Feel Mayer Brown’s Pain, “The chair of one Am Law 50 firm said it most bluntly: ‘That could have been written about us.’”
In response, the Slate commentary The Fascinating Vampire Squids of Law by Mark Obbie basically points out that the “The report of [Big Law’s] death was an exaggeration”. Law firm consultant Ann Lee Gibson writes about the natural “Big Business of Big Law” in her blog post I’m Shocked! Shocked! And Robin Sparkman, editor in chief of the American Lawyer, writes in Don’t Bury Big Law Just Yet that “a deeper look at how the largest firms are doing, short-term and long-term, shows resilience and growth.” She refers to the 2012 AmLaw 100 Profit Data and A Ten-Year View of The AmLaw 100 to make the point that “certainly, law firms are not in the heyday of the boom years… But make no mistake, the giant law firms in this country are alive, well, and rich.” Well, my read of those charts is that some outperforming winners are alive and rich, but there is clearly a different story for many middle of the pack firms, and some early warning signs for the underperformers.
I’ve always found law firm consultant Bruce MacEwen to be rational in using data to arrive at the conclusions he draws. In his interview Survey: Law Firms Must Change, But Don’t Know How by Lee Pacchia of BloombergLaw, he discusses some of the challenges to Big Law and the strong consensus that law firms need to change that he discovered in “not exactly a scientific survey” of “almost 150 respondents”. But he really dives into the AmLaw data in his blog post CAGR for Dummies to dole out some tough love to the Big Law optimists, and in particular, Ms. Sparkman. His analysis of the data finds that “adjusted for headcount growth and in constant dollars—the AmLaw 100 were not even holding their own during the 2009—2013 period. Indeed, their revenue growth rate would have needed to be 23% higher than it was just to keep even with inflation and headcount growth. If this is resilience and growth, then I should have been a professional athlete; I could count on the bar being lowered every year and still be able to set annual records at the new diminished height.” Ouch!
I recently completed a month-long global business trip to law firms and corporate legal departments in UK, Australia, USA and now Canada, during which I read Niall Ferguson’s book Empire: How Britain Made the Modern World. Obviously this is an oversimplification, but I couldn’t help drawing some parallels with Big Law – or at least the firms that make up Big Law. “Many charges can be levelled against the British Empire… nevertheless, the fact remains that no organisation in history has done more to promote the free movement of goods, capital and labour”, but ultimately “within a single lifetime, the Empire unravelled.” Mr. Ferguson summarizes that “throughout the 20th century, the principal threats – and the most plausible alternatives – to British rule were not national independence movements, but other empires.”
In other words, I don’t see an exogenous threat to Big Law, such as LPO (see my last blog post, “Are LPOs Really Stealing Deal Work From Law Firms”?!) But I do see that the law firms within Big Law, the empires so to speak, are increasing the pace and vigor of competition between themselves. There will be winners and losers in the new hyper-competitive Great Game of Big Law. Strategy, leadership, tactics, technologies, and best practices will all play an increasingly important role in how law firms distinguish themselves to compete for law department business.
Every week I am lucky to see these experiments ‘at the edge’ of legal services, from Clifford Chance hiring efficiency ‘black belts’ to streamline work to Seyfarth Shaw deploying their SeyfarthLean process model with LPOs to become a strategic partner with their clients.
For example, just this week I met with Mark Tamminga, leader of innovation initiatives at one of Canada’s leading firms, Gowlings. His office certainly didn’t look like any other lawyer’s office I had ever visited. (Photo below.) As Mark and I discussed their plans to launch a Legal Project Management initiative to improve the predictability of outcomes and fees for their clients, I learned how Gowlings has unbundled legal work and directed elements of the work to the right lawyer or non-lawyer resources, and designed and built its own proprietary technology to automate workflow and increase productivity. I have no doubt that innovative lawyers like Mark at law firms like Gowlings, who are prepared to invest in the efficient practice of law on behalf of their clients, will be amongst the winners as the Big Law story is written. Unfortunately, an article about these lawyers wouldn’t be as sensational as ‘Mad Men 2 – Big Law.’