Law Firm of the 21st Century

U.K. magic circle firm Eversheds recently released a report entitled Law firm of the 21st century. Eversheds commissioned RSG Consulting to research and prepare a report into how the legal profession will look ten years from now. In his introduction to the report, David Gray, the firm’s Chief Executive remarks that the results are enlightening and sometimes unexpected. While I found the report an interesting read I don’t entirely concur. Those interviewed included partners from the world’s 25 largest international law firms (by turnover). Providing the clients’ perspective were General Counsel, Legal Directors and Finance Directors from leading corporations and investment banks. The report’s findings are on the whole predictable if on occasion somewhat illuminating.

Although LPO advocates may on a first glance feel a touch disillusioned at the omission of any specific reference to India, Outsourcing or Offshoring, if one delves beneath the surface it is clear that the drivers fanning the flames of legal process outsourcing are well and truly acknowledged. While none of the aforementioned buzzwords appeared within the text what I did find were repeated references to the drivers of the legal process outsourcing industry, namely, cost control, globalization and legal services commoditization.

There appears to be an intriguing divergence of opinion on the issue of costs. Only 21% of law firm partners believed that providing better value for money and justifying their costs would present a challenge in the decade to come. Well if the partners aren’t worried then we can all pack our bags and go home! Hang on just a second that might be the case if the partners paid their own bills. Well over half of the clients surveyed (57%) identified controlling legal costs and achieving value for money as the major challenge. One anonymous client (someone clearly after my own heart) is quoted as saying that law firms need to “wake up and smell the roses. The demands they have made in terms of their fees are simply enormous and it can’t go on inevitably”. I think he meant to say “indefinitely” but we all get the general gist.

Congruence of opinion was apparent on the issue of commoditization and standardization being important trends affecting the legal profession generally. Most partners and clients agreed on this issue but felt that this was for “bread and butter” routine legal work. Unless I’m unaware of some of the subtle nuances of first pass document review work I would place this peg firmly in the whole of “bread and butter” legal work. We’ve all read this figure many times over now, but I’ll reference it once again – KPMG estimates that such work accounts for between 58-90% of the total cost of litigation in the U.S. That’s one hell of a chunk of legal work in the process of being commoditized, standardized and suitable for LPO.

For those readers who are interested in reading the whole report click here.