From Megamania to Expertopia: Four Scenarios for the Legal Profession in 2020
As I wrote two weeks ago here I will be detailing and discussing a unique and influential study that was conducted a year and a half ago. Here is the latest article.
Until recent years, changes in legal services arrived in slow-motion and were easy to handle. But today the future requires advance preparation, almost like an appearance in court. Market forces keep growing more complex and global events are accelerating. Corporate counsel, and especially their law firms, risk getting blindsided and having to catch up to the present.
Indeed, just over the last decade, litigation fees soared and companies began seeking to offshore and commoditize legal work. The consequences have been deeply disruptive. And as business uncertainties grow, legal practitioners face a constellation of new challenges that can spur or slow the growth of the companies they serve.
General Counsels are leaders, not just firefighters. They must not only maintain current performance, but enhance the productivity of their teams, reduce burdens to the company, and strategically plan for the future. So what will the legal future look like for corporations? The industry could consolidate, as financial services did. Or barriers may intensify specialization, somewhat as they have in healthcare. How can we identify such scenarios early and prepare for them, rather than coping after they arrive?
The Legal Transformation Study: Your 2020 Vision of the Future is a comprehensive analysis of these challenges, with a wealth of projections about the changing role of the GC, opportunities, and paths for preparedness. Its conclusions arise from an expert, wide-ranging examination of trends and variables facing the industry. To avoid blind-spot assumptions, study authors examined the spectrum of possibilities. They also looked at fields like HR, where metamorphosis has been swift and unexpected. The result is a quartet of novel, illuminating scenarios.
The Legal Transformation Study is a milestone toward this end. The future is all about uncertainties, but it concludes that two will likely dominate:
Meta-Uncertainty 1: What Will the Legal Services Landscape Look Like? Will a few mega-firms rule the earth or will specialty shops prevail? Will we see a handful of Wal-Mart-type law firms or endless boutiques?
Meta-Uncertainty 2: Will Regulatory Barriers Rise or Fall? Will state rule-systems grow more harmonious or more diverse, complex, and forbidding? The answer is unclear and companies can face impossible decisions. For instance, consider the EU data privacy initiative. Europe is a quilt of regulations on the confidentiality of Internet information and companies may have to choose between refusing EU data to a U.S. judge who has ordered it, or providing it and risking EU penalties.
In combination, the two meta-uncertainties yield four strikingly varied scenarios of the future. In two, the world is a jungle of rule-systems, with either the huge or the nimble prevailing. In two more, regulations grow uniform, with techno-giants or small, online firms flourishing. Each scenario describes a culmination, and the 2020 world will likely lie on the trendline, not at the terminus.
Scenario 1: Blue-Chip Megamania
This is the world of the one-stop megashop. Major economic blocs — East Asia, Europe, and North America — are vying so ferociously that protectionist walls have risen again. Only legal behemoths can break through them. About ten mega-firms sprawl across continents, and they offer the gamut of services: legal, forensics, accounting, research, litigation support. Far below lay tiny, highly specialized firms, of inconsistent quality.
Most GCs simply run a department of liaisons to the mega-firms. Choosing one is difficult. The buying gets diluted. A global, dominant firm brings numerous conflicts of interest for a potential client, and sharply narrows the buying field. The same forces also forge lock-in. Hence the GC faces the challenge of obtaining legal quality across the board, since the mega-firm may lack the expertise needed for, say, South America.
In many ways this is the environment we are in now. Law firms are spreading across the globe and seeking to penetrate the legal services market, both in practice and in process work. Suppose you are in patent law. If so, are you also in patent prosecution? If you are in patent prosecution, then are you in patent filing? Law firms are teetering on the edge of trying to own it all.
Scenario 2: Expertopia
Here, the world is also a patchwork of regulation-systems, complex and volatile. Yet now they actively thwart the mega-firms and a flotilla of speedy, agile specialty shops has arisen to negotiate the barriers.
This is the antithesis of Megamania. Gone are the general services of a law firm with 17 practice areas. Buyer choice increases dramatically — a mixed blessing. A global corporation now needs, say, different patent counsel in a string of countries. The GC engages the firms and soon is managing a swarm of outside attorneys.
Most GCs are now executive vice presidents and serve on the governance and compliance committees, since managing these providers has become critical. Yet, surprisingly, hiring among these myriad, highly competitive outfits is much easier. Companies just use Legal OnRamp or ACC ratings. Rating agency evaluations are validated by peers not paid-for listings so purchasers are able to better choose the appropriate counsel.
Scenario 3: Technolaw World
Globalization is at a climax and has proliferated. Borders have virtually vanished and regulations tend to align across nations. Travel is ultra-fast and easy. Free trade has led to unprecedented peace and wealth creation. All media have merged, and the wireless internet is now an ultra-fast, super-collaborative system. Ubiquitous video screens enable near-constant contact with others.
Mega-firms span the planet, but their role has changed. Since smart technologies now perform much of the lawyer’s former work, firms focus more on devising and selling software platforms. Attorneys remain but often their job is to create integrated legal/business processes, along with business experts.
We use the phrase ‘legal advice in a box’ and view the law as a technology deliverable. The human element is partially removed here, as lawyers become techno-lawyers. You can see bits and pieces of this happening right now. Whether it expands, contracts, or flatlines we have yet to see.
Mediation and arbitration have greatly increased. Damages are capped in tort cases. Losers in litigation pay the fees of the winners. As state regulations have declined, specialists in their byways have slowly disappeared.
This world is highly litigious and lawsuits can yield enormous settlements, but technology handles most of the combat. However, company preparation is critical and hence the GC becomes a strategic risk manager. GCs reduce costs through good outsourcing relationships, which tend to be strong and resilient.
Scenario 4: E-Marketplace
This is the doomsday scenario. The world economy has collapsed and nations have massively deregulated to prod it to life. The Internet helps struggling laypeople do much of the work of professionals, and legislation removes the need for legal credentials. Amateurs and aggregators assume key roles. Law is no longer a high-margin profession, given outsourcing and technology.
Since global harmony has led to similar rules, legal software proliferates. GCs buy services mainly over the Internet, through a Legal Facebook platform or other Web2.0 portal. Everything is online that can be. Heading a shrunken department, the GC works closely with the CIO and tends to focus on business-process planning, workflow analysis, and business-rule validation. In-house lawyers expand their role as educators and develop videos to explain legal procedures to non-attorneys.
The GC has little relationship with the providers. Price is the main concern, along with online ratings. At any hint of a problem or price change, the GC may find another provider.
This scenario represents a 180-degree turn away from relationships. Law is and forever will remain based on that trusted advisor concept. E-Marketplace takes that much of that out of the equation.
The Future of the Study
The Legal Transformation Study: Your 2020 Vision of the Future continues to evolve. This study was not a snapshot - it’s an organic living document.
In today’s world, where domino effects can begin in the far corners of the peripheral vision and foresight has never mattered more, the Legal Transformation Study confers a critical competitive advantage.
Until recent years, changes in legal services arrived in slow-motion and were easy to handle. But today the future requires advance preparation, almost like an appearance in court. Market forces keep growing more complex and global events are accelerating. Corporate counsel, and especially their law firms, risk getting blindsided and having to catch up to the present.
Indeed, just over the last decade, litigation fees soared and companies began seeking to offshore and commoditize legal work. The consequences have been deeply disruptive. And as business uncertainties grow, legal practitioners face a constellation of new challenges that can spur or slow the growth of the companies they serve.
General Counsels are leaders, not just firefighters. They must not only maintain current performance, but enhance the productivity of their teams, reduce burdens to the company, and strategically plan for the future. So what will the legal future look like for corporations? The industry could consolidate, as financial services did. Or barriers may intensify specialization, somewhat as they have in healthcare. How can we identify such scenarios early and prepare for them, rather than coping after they arrive?
The Legal Transformation Study: Your 2020 Vision of the Future is a comprehensive analysis of these challenges, with a wealth of projections about the changing role of the GC, opportunities, and paths for preparedness. Its conclusions arise from an expert, wide-ranging examination of trends and variables facing the industry. To avoid blind-spot assumptions, study authors examined the spectrum of possibilities. They also looked at fields like HR, where metamorphosis has been swift and unexpected. The result is a quartet of novel, illuminating scenarios.
The Legal Transformation Study is a milestone toward this end. The future is all about uncertainties, but it concludes that two will likely dominate:
Meta-Uncertainty 1: What Will the Legal Services Landscape Look Like? Will a few mega-firms rule the earth or will specialty shops prevail? Will we see a handful of Wal-Mart-type law firms or endless boutiques?
Meta-Uncertainty 2: Will Regulatory Barriers Rise or Fall? Will state rule-systems grow more harmonious or more diverse, complex, and forbidding? The answer is unclear and companies can face impossible decisions. For instance, consider the EU data privacy initiative. Europe is a quilt of regulations on the confidentiality of Internet information and companies may have to choose between refusing EU data to a U.S. judge who has ordered it, or providing it and risking EU penalties.
In combination, the two meta-uncertainties yield four strikingly varied scenarios of the future. In two, the world is a jungle of rule-systems, with either the huge or the nimble prevailing. In two more, regulations grow uniform, with techno-giants or small, online firms flourishing. Each scenario describes a culmination, and the 2020 world will likely lie on the trendline, not at the terminus.
This is the world of the one-stop megashop. Major economic blocs — East Asia, Europe, and North America — are vying so ferociously that protectionist walls have risen again. Only legal behemoths can break through them. About ten mega-firms sprawl across continents, and they offer the gamut of services: legal, forensics, accounting, research, litigation support. Far below lay tiny, highly specialized firms, of inconsistent quality.
Most GCs simply run a department of liaisons to the mega-firms. Choosing one is difficult. The buying gets diluted. A global, dominant firm brings numerous conflicts of interest for a potential client, and sharply narrows the buying field. The same forces also forge lock-in. Hence the GC faces the challenge of obtaining legal quality across the board, since the mega-firm may lack the expertise needed for, say, South America.
In many ways this is the environment we are in now. Law firms are spreading across the globe and seeking to penetrate the legal services market, both in practice and in process work. Suppose you are in patent law. If so, are you also in patent prosecution? If you are in patent prosecution, then are you in patent filing? Law firms are teetering on the edge of trying to own it all.
Scenario 2: Expertopia
Here, the world is also a patchwork of regulation-systems, complex and volatile. Yet now they actively thwart the mega-firms and a flotilla of speedy, agile specialty shops has arisen to negotiate the barriers.
This is the antithesis of Megamania. Gone are the general services of a law firm with 17 practice areas. Buyer choice increases dramatically — a mixed blessing. A global corporation now needs, say, different patent counsel in a string of countries. The GC engages the firms and soon is managing a swarm of outside attorneys.
Most GCs are now executive vice presidents and serve on the governance and compliance committees, since managing these providers has become critical. Yet, surprisingly, hiring among these myriad, highly competitive outfits is much easier. Companies just use Legal OnRamp or ACC ratings. Rating agency evaluations are validated by peers not paid-for listings so purchasers are able to better choose the appropriate counsel.
Scenario 3: Technolaw World
Globalization is at a climax and has proliferated. Borders have virtually vanished and regulations tend to align across nations. Travel is ultra-fast and easy. Free trade has led to unprecedented peace and wealth creation. All media have merged, and the wireless internet is now an ultra-fast, super-collaborative system. Ubiquitous video screens enable near-constant contact with others.
Mega-firms span the planet, but their role has changed. Since smart technologies now perform much of the lawyer’s former work, firms focus more on devising and selling software platforms. Attorneys remain but often their job is to create integrated legal/business processes, along with business experts.
We use the phrase ‘legal advice in a box’ and view the law as a technology deliverable. The human element is partially removed here, as lawyers become techno-lawyers. You can see bits and pieces of this happening right now. Whether it expands, contracts, or flatlines we have yet to see.
Mediation and arbitration have greatly increased. Damages are capped in tort cases. Losers in litigation pay the fees of the winners. As state regulations have declined, specialists in their byways have slowly disappeared.
This world is highly litigious and lawsuits can yield enormous settlements, but technology handles most of the combat. However, company preparation is critical and hence the GC becomes a strategic risk manager. GCs reduce costs through good outsourcing relationships, which tend to be strong and resilient.
Scenario 4: E-Marketplace
This is the doomsday scenario. The world economy has collapsed and nations have massively deregulated to prod it to life. The Internet helps struggling laypeople do much of the work of professionals, and legislation removes the need for legal credentials. Amateurs and aggregators assume key roles. Law is no longer a high-margin profession, given outsourcing and technology.
Since global harmony has led to similar rules, legal software proliferates. GCs buy services mainly over the Internet, through a Legal Facebook platform or other Web2.0 portal. Everything is online that can be. Heading a shrunken department, the GC works closely with the CIO and tends to focus on business-process planning, workflow analysis, and business-rule validation. In-house lawyers expand their role as educators and develop videos to explain legal procedures to non-attorneys.
The GC has little relationship with the providers. Price is the main concern, along with online ratings. At any hint of a problem or price change, the GC may find another provider.
This scenario represents a 180-degree turn away from relationships. Law is and forever will remain based on that trusted advisor concept. E-Marketplace takes that much of that out of the equation.
The Future of the Study
The Legal Transformation Study: Your 2020 Vision of the Future continues to evolve. This study was not a snapshot - it’s an organic living document.
In today’s world, where domino effects can begin in the far corners of the peripheral vision and foresight has never mattered more, the Legal Transformation Study confers a critical competitive advantage.