The law firm of the future will probably be more like a shipyard than a factory.
The conversion is already underway in many law firms.
This is the second of a series of nine posts that will describe and explore seven characteristics[note 1] that will determine which law firms remain successful in the legal services industry of the future, and what law firms can do now to build them into their operations and professional cultures.
The basic paradigms that governed law firms for much of the past 200 years have shifted forever and will continue to shift even more rapidly and with even greater risks for organizations that ignore them. One of the most basic changes is already underway in many law firms, the conversion from a "factory" model to a "shipyard" model.
Traditionally, law firms prepared, produced, and delivered legal services largely in-house, much like a factory in the early twentieth century. Substantially all of the core functions, such as research, collaboration, and documentation, were performed by lawyers, legal assistants, and staff. Only the "raw materials" were brought in from outside the firm -- things like paper, ink, and books. Almost everything else was produced "from scratch" in the firm.
Beginning about ten years ago, many of our law firm clients began to rely more on outsourced services to provide more of the "value added" components of a legal service, rather than just office supplies, and we have seen this trend accelerate as outsourcing has moved into core legal-service functions that previously were assumed to be capable of performance only inside the firm. Examples include document reviews in due diligence functions, patent and trademark research and analysis, and the security of client documents and information.[note 2] Like a shipyard, the law firm contracts for and collects all the essential components for the legal product or service. The firm then assembles those parts to meet each client's specifications, applying its expertise in legal analysis and its intimate understanding of the client's needs and expectations.
The business case for the "shipyard" model has several strong arguments, each of which is already being proven in the experience of law firms today:
- The outsourced functions can be performed at a much lower cost than trying to maintain the staff, facilities, and professional infrastructure needed to perform them in-house.
- Expert external service providers can perform the function with more consistent levels of technical quality and service delivery than most law firms.
- Outsourcing some of the core functions in the preparation and delivery of a legal service allows the law firm to focus its resources and attention on those aspects that are the true added value in a matter, i.e., the unique expertise and knowledge of the client's needs and expectations, which they -- and only they -- are in a better position to deliver.
1The seven defining characteristics of the law firm of the future are:
- A conversion from a "factory" model for the production and delivery of legal services to a "shipyard" model
- Closer, ongoing client relationships
- Sustainable profitability
- Very high workflow leverage
- "Anytime, anywhere" service delivery capabilities
- An intense focus on quality management
- A predisposition for innovation.
2See N. Clark, ed., Outsourcing of Core Legal Service Functions: How to Capitalise on Opportunities for Law Firms (Globe Law and Business, 2021). Click here for more information and to order a copy from the publisher.
For more information about the Walker Clark "futures practice," contact the author by e-mail.