A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

Adjusting-to-a-NewLaw-World (Part 1)

Tuesday, July 28, 2015

By Jordan Furlong, Principal, Edge International & 2015 ALPMA Summit keynote speaker

Legal futurist Richard Susskind once summed up the challenge of bringing his message of change to boardrooms filled with law firm executives: “It’s hard to tell a room full of millionaires that their business model is wrong.” 

You can understand why: The traditional law firm model has been incredibly successful for the past several decades, providing a good life for most of its for its owners and operators and an extraordinarily good life to some of them. Criticizing the law firm business model has, for quite some time, been akin to telling Michael Clarke that yes, he’s doing alright out there on the pitch, but his swing looks a little odd and he should change it.

And in all fairness, the traditional law firm has delivered benefits not only to lawyers, but also to clients. 

Both consumer and corporate clients of these firms invariably have received high-quality products and services in an ethical and professional fashion. Clients have not been so pleased, however, with the prices they’ve paid for law firms’ work (both the size and the unpredictability thereof), or with the often cavalier treatment, patronizing manner, and poor communication that these firms have given them. But when law firms owned and operated by lawyers were the only available provider of legal services, what else could clients do?

Now, of course, that’s all changing 

Thanks to reforms that began right here in Australia, the global legal market is currently experiencing the equivalent of a slow-motion earthquake. Regulatory liberalization has spread to Great Britain and is gradually infiltrating North America. 

New competitors to lawyers and law firms are springing up, both inside and outside the regulated space, giving clients options and changing clients’ expectations about the nature, price, delivery and accessibility of legal service providers. 

Technological advancements, especially in artificial intelligence, are progressing faster and farther than most people in the profession, even me, expected. In isolation, any of these developments would have a profound impact on lawyers. 

Taken together, they’re changing our professional world.

Whatever its merits and its flaws have been, the old law firm model is breaking down, because it’s simply not suited for the new legal environment that’s emerging.  The old model — inefficient, deliberative, unresponsive and complacent — was predicated on vast knowledge asymmetry between buyers and sellers, lawyers’ regulatory monopoly on legal service provision, and the absence of powerful technology that could generate legal products and services at a fraction of the usual time and cost. 

None of those conditions holds true anymore, especially in the wake of the GFC and the upheaval it created in every kind of market worldwide. The result is something new for the legal profession — in the words of Australia’s Dr. George Beaton, who coined the term, it’s a “NewLaw” revolution. And law firms are going to have to come to grips with it.

 My own working definition of NewLaw is this: “Any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed.” 

I’ve posted here at the ALPMA blog previously about several outstanding Australasian examples of NewLaw, and at my own blog Law21 about NewLaw offerings worldwide. Some of these entities and options can be used by law firms to make their own practices and procedures more effective and productive; others, however, are meant to be used by corporate and consumer clients themselves, and therefore constitute a direct competitive threat to traditional law firms. 

One NewLaw practitioner of the latter variety put it to me in plain language: “Our goal is to take lawyers out of the process.

The end of lawyers' monopoly

What NewLaw really signals is the long-overdue rise of substitute goods in the legal market. 

Lawyers have enjoyed for many years both de facto and de jure monopolies on legal service provision: we had no competitors, because we allowed no competitors to develop. That’s now over. 

Clients have choices that they’ve never had before. They can use a paraprofessional, or a software program, or an out-of-jurisdiction lawyer, or a NewLaw provider, instead of or as a complement to traditional law firms. Maybe they’ll only get 80% or 65% of the quality and impact of a law firm — but they’ll get it for 40% or 25% of the price, and that’s good enough for them. And over time, those quality gaps will close while the price gaps lengthen. 

We’re no longer the only game in town, and we never will be again. 

Editor's Note

In the second part of this blog post, Jordan discusses how adapting to this new environment will be a three-stage process for most law firms and provides advice for law firm leaders guiding their firms on this journey.  

Jordan's keynote presentation "Rising Waters: How Law Firms Can Adapt To The New Legal Environment"at the 2015 ALPMA Summit,10-11 September, Gold Coast Convention & Exhibition Centre,  will explore this topic in more detail.  

Jordan is also presenting a pre-Summit Master Class Workshop on Wednesday 9 September on "Integrating 'NewLaw' into Your Firm", where together with Dr Neil Oakes, he will explain  how traditional firms can import and integrate 'NewLaw’ features into their own businesses, in order to improve their own competitiveness.  The workshop includes a brief snapshot of the global legal market, an overview of NewLaw market participants and an analysis of the essential features that allow these new participants to be so competitive.  You do not have to attend Summit to attend this workshop.

Please note, early bird savings for Summit and the pre-Summit Masterclass Workshops end on Sunday 2 August, so register now.

About Our Guest Blogger

Jordan Furlong is a lawyer, consultant, and legal industry analyst based in Ottawa, Canada, who forecasts the impact of the changing legal market on lawyers, clients, and legal organizations. 

He has delivered dozens of addresses to law firms, state bars, law societies, law schools, judges, and many others throughout the United States and Canada on the evolution of the legal services marketplace. He is a Fellow of the College of Law Practice Management and serves as Strategic Advisor in Residence at Suffolk University Law School in Boston. 

He is a principal with Edge International and blogs about the new legal market at Law21.

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