The recently released FT report on US Innovative Lawyers 2012 points to two ways large law firms can compete for business.
Innovation in law practice is one. About this the FT observes that
“[m]ost of the top US law firms have similar strategies – to focus on retaining premium work and to avoid commoditisation. To achieve this, they need continually to prove that they are ideal for handling complex, high-value matters.”It seems obvious that few firms can carve out the “premium” position.
Innovation in service delivery and client value is a second way, what the FT calls the ‘business of law’. In my view, this will determine who wins the vast middle ground of “bread and butter” legal work that lies between premium and commodity.
The Business of Law awards go to many familiar innovators, for example, Axiom’s Managed Service business, Littler’s CaseSmart, Crowell’s project management, and Seyfarth’s Lean. For my tech-focused readers, I have bad news: searching the PDF of all award articles for ‘technology’ and ’software’ yields nothing new or surprising.
The FT US managing director offers what I consider an explanation for limited action on the thin Business of Law front. He writes
“while the US legal profession is, moving into the 21st century in how it communicates with clients, the report suggests that, in terms of process innovation, US firms lag behind those in the UK. While there are the beginnings of change, relatively few top firms have tackled seriously their hourly fee models, despite the increasingly vociferous demands of clients.”
Firms need not choose one way over the other. To out-innovate in law practice, however, they must win the talent battle. Ensconced incumbents have the advantage here. To out-innovate on service delivery and value, in contrast, requires only imagination and will. Yet that could be a big constraint, as the closing words of the introductory article suggest:
“The question for the US legal profession is whether the financial crisis is a turning point similar to that facing Sears, the department store, in the 1980s when it failed to read the implications of discount retailing for its core business.
All the chairmen of the top firms talk about change and the need to ‘not fight the last war’. And yet at the same time they cannot, they say, see their firms being all that different in five years’ time.”
The market remains wide open for firms with imagination and the will to win a bigger share of bread and butter work. And I expect technology and software will play a big role, in spite of its conspicuous absence from this report.