Will Law Firms Still Be Recognizable in 2030?
While economic indicators in the legal industry are largely encouraging, client demands are continuing to cast doubt on the long-term sustainability of the current law firm model. This blog recently noted we have a healthy, if somewhat stagnant, legal market, but current trends, including a focus on low-cost labor, will continue. Alternative fees and alternative legal services models will increase. Firms must adjust to new ways of doing business. In short, a fundamental shift in the legal industry is underway; one that may marginalize traditional law firms by the close of the decade.
That was the conclusion of The 2020 Report on the State of the Legal Market by the Center on Ethics and the Legal Profession at the Georgetown University Law Center and the Thomson Reuters Legal Executive Institute and Peer Monitor (disclaimer: FindLaw is a part of Thomson Reuters, but took no part in the creation of the report). The annual report examines the state of the legal industry using data from Thomson Reuters' Peer Monitor.
Harbingers of a Dramatic Shift
While law firms have already implemented changes to traditional business models and legal services, these have been incremental steps addressing specific problems. These incremental shifts point to a coming larger change. The report notes that law firms are already:
- Relying on other professionals and specialists to address client needs more comprehensively
- Using internal systems and technology to increase efficiency
- Facing competition from non-law firm service providers, including the Big Four
- Using “captive subsidiaries" to provide professional services related to the practice of law, such as lobbying, regulatory tracking, risk consulting, HR, and others.
These innovative approaches signal a new law firm model is emerging for the coming decade.
Multidisciplinary, Client-Driven Services
The report predicts that law firms will scale “alternative" legal services. In fact, the report argues, such services can no longer rightly be called alternative. Instead, the entire legal industry will move toward an “integrated solutions model" spurred by client demands for accountability, lowered billing and an increased reliance on in-house lawyers.
Clients are driving the change, the report's authors argue, and have since the Great Recession spurred clients to stop deferring to outside law firms, including a lowered tolerance for the billable hour.
While nothing in the report should come as a surprise to people who are monitoring the state of the legal industry, the pace of change for the coming decade may stun some law firms still committed to traditional ways of practicing law.
- Legal Industry Revenue for 2020: Meet the New Year, Same as the Old Year? (FindLaw's Greedy Associates)
- Peer Monitor Index Shows Mixed Economic Performance in Legal Industry in 2019 (FindLaw's Greedy Associates)
- Silicon Valley Betting Big on Legal Tech (FindLaw's Technologist)
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