Law firm leaders and planners -- indeed, all lawyers -- are right to be concerned about the future of the legal profession. We can expect significant changes, powered by increasingly sophisticated client expectations and the more powerful service delivery capabilities of advanced technology, to redefine what a "law firm" will look like and how it will operate in the 2020s...
...which are only a few months away.
In the rush of visionary strategic thinking -- which our firm welcomes and encourages in our clients -- it is easy to overlook three fundamental structural needs that will determine whether a law firm will be able to implement its strategic objectives and remain competitive and profitable.
Will your law firm be a more-or-less traditional law firm, or will you need to adopt a new corporate structure and organizational concepts in order to remain competitive? Will your law firm have the decision-making structures that you will need to remain alert, flexible, and responsive in what might be an uncertain and somewhat ambiguous competitive environment? Will you have processes that produce sound, fact-based decisions, and will support -- rather than obstruct -- successful implementation? Will your practice groups facilitate your responses to clients' needs and expectations, or interfere with them. Will you be able to manage the changing dynamics, in most legal markets, of managing the succession of leadership to the "next generation" of partners, while also providing productive roles for senior lawyers who want to remain active in the firm?
As the concepts and defining components of the value of a partner to his or her law firm continue to evolve (and, in some firms, undergo revolutionary change), how will you construct a partner compensation system that continues to promote and reward the value-creating performance that you will need from the partners in your firm? Our firm's recent discussions about partner compensation with some of our clients suggest that there is a growing awareness in some firms that their traditional partner compensation concepts -- whether lockstep, "eat what you kill," or something in-between -- might need fundamental rethinking now in order to support the types and levels of partner performance they will need in the 2020s.
Advanced technology and artificial intelligence will continue to change the way that successful law firms work. The great vulnerability of most law firms today, especially midsize firms, is that they have never looked deeply into their internal operating procedures and practice management structures. In other words, they don't really understand how to produce and deliver legal services to clients. This produces a potentially lethal risk: that advanced technology and AI will only enable them to execute bad processes faster, not better. Law firms should consider how they can improve lawyer productivity today -- not five years from now -- by streamlining their internal processes and installing serious quality assurance systems that prevent mistakes, rather than fix them after they have already cost the firm time and money.
One of the best ways for a law firm to prepare for the 2020s and the 2030s is to start serious work in these three areas today.