Law firms in the new world
The Economist highlights the paradox of the jobless recovery where a “statistical recovery” is taking place in the face of “human recession”. Despite sustained and rapid growth in the US economy, jobs continue to disappear.
Jobless growth is a product of economies shifting away from reliance on manufacturing during the latter part of the 20th century towards information-based industries. People are no longer the linchpin; money and “man hours” are now disconnected – well, perhaps not in those laggard law firms that still charge on a time basis 😉
Law is a service industry. Although technology has transformed the way people communicate, we would argue that the adoption of technology to fundamentally transform the way we deliver legal professional services is still yet to come. Nevertheless, the information age has heralded the emergence of the “mega” law firm. Interestingly, Australia has some of the largest firms in the world (e.g. firms of around 1000 legal staff) despite being a small economy on a global scale.
Following on from the global financial crisis, reports abound globally about the shedding of lawyers from large firms, as work slows and clients think twice about the need to pay the fees demanded by the mega firms. However, the pushback against fee structures for legal services pre-dates the global financial crisis, reflecting pressure for change in the way legal services are delivered and costed.
Like the rest of the labour market, lawyers are not immune from job losses and the need to re-train. The job for life is as much at risk in the legal profession as it is in other industries.
Law firms also need to retrain
What can be done? For workers wanting to protect their jobs, re-training and upskilling is one way to improve your chances. Paraphrasing from Richard Susskind, there is a need now for law firms to act as business partners and thus to have expertise beyond black letter law. We strongly agree with this. Very experienced lawyers and lawyers coming into the law as a second or subsequent career have a lot to offer. They bring the sum of their collective experience to bear on the services they deliver.
Law firms therefore could act as a launching pad for entrepreneurs (that have studied law or associated disciplines, or experienced lawyers with an entrepreneurial itch) to train in a law firm before their entrepreneurial launch – or to stay if they wish to pursue law and the firm can afford it. The reciprocity in this relationship is that the law firm is seeding its future clients while gaining broader business/entrepreneurial skills within its own ranks.
Law firms can do it differently!