Will covid19 help you reinvent your legal services?

Richard W. Smith
April 13, 2020

Will COVID-19 really change the legal?

What lasting impact would the pandemic have on how law firms deliver legal services? Would anything profoundly change in their business model? Will the billable hour finally go away? 

Richard W. Smith discusses these and suggests what needs to happen before the real transformation could take place. Seemingly, it feels like the change we are witnessing now is merely superficial.

"For the past couple of weeks, one of the most common themes I've seen about COVID-19, insofar as it relates to the legal profession, is how it has changed and continues to change, the industry/profession…" -  Richard W. Smith

What is really different this time?

RWS: To this end, I have seen (and read) articles that I would not think possible three to four months ago written about:

  • the changing nature of remote working in the profession, and
  • the importance of Zoom/Skype and Microsoft's Teams,

to name but a few.

But I want us to stop here, take a step back, and ask: "Is this likely to be the long-term outcome?"

When I ask this, keep in mind that this is a profession that has fought tooth and nail to keep to the same business operating model for over 30 years (if not 100) despite having already recently lived through one of the worst global economic downturns of all time (the GFC).

What can we really say is different this time?

For sure, we can say we have given our business continuity plans (BCPs) a tough workout. And, to be fair, I'd bet that even the most conservative of BCPs didn't factor in a COVID-19 event.

And while we now know that most of our workforce can work remotely and, ironically enough, with the use of timesheets, we can also claim that they remain 'productive' whilst working from home.

However, does this truly foreshadow a change in the manner in which the industry is going to be managed?

Are these changes enough?

My take? 

While all of the above is true, it takes place in circumstances most of us had not predicted. Moreover, many of us feel uncomfortable being in said circumstances. I'd bet there are very few people out there who are happy being locked up at home for four weeks - family or no family.

But this is a far cry from saying we will see the dawn of a 'new normal' whenever normality returns.

Yes, understanding our purpose is now more critical than ever. Likewise, we cannot hope to survive if we do not look to find the solutions our clients seek and need. These solutions will evolve, but in a post-COVID-19 world, these will not necessarily bring about a change to the structure of how a law firm operates.

My long and strongly held view is - to see the real evolution of the business model of law, we need to start with how we incentivize and reward our partners and employees.

And to start this process, we need to begin to truly align our firm's internal incentives/rewards to those of our customers so that we can create value for them. In short, our incentives/rewards must align with our customers' needs and incentives.

So far, I have read (tens of) thousands of words on how COVID-19 will change the legal profession. I yet have to see authors suggest, or even discuss, the above issues.

If not, what else should the legal do?

My take from all of this is this:

If we want what we are currently going through to be truly more than a mere 'stop-gap' solution, if what we want from a post-COVID-19 world is a real structural and ongoing change in the profession, then…

We need to start to have a conversation about how our system of rewards and incentives is broken. And right now is the time to be having this conversation.

Changing incentives is just a start

CL: Incentives are indeed at the core of everything a law firm does. If you reward your staff by the hour, you are likely to transpose those costs "upstairs" right to your clients. And thus the clock and legal billing revenue would become the sole obsession.

And if the only effect, as Ron suggests, is that a few law firms “go under” due to a drop in demand for legal services, we may fail to see any real legal innovation from the late majority.

(legal entrepreneurs are, of course, a different story)

Biglaw governance needs an update

As Daniel Acevedo pointed, if law firms want to thrive, they need to address their internal functions and roles. 

The problem is - as long as law firm partners are, at the same time, service team leaders, shareholders, and heads of their business development, no change can truly take place. 

“I just think the Big4 are in a much better position than law firms. When we have a client problem to solve, my team of lawyers (naturally) participates. However, we also have the input of a lot of other professionals. You don’t find such multidisciplinary teams in your every-day law firm…”  - Daniel Acevedo

Diversity is key, but so is accountability. 

Imagine running a  company where you are in charge of sales, production, tech implementation, brand development (and much more). What you lack at that point is accountability.

“The number one thing law firms need to address for the future is to develop a transparent and accountable corporate governance structure.

There should be one guy or girl who should only think about how to optimize day-to-day operations. That girl (or guy) should also have sufficient power to be able to enforce their decisions, policies, and (legal) tech choices. There should be no exceptions (not even to partners).

The same could be said for sales. There must be a separation between legal service production (i.e., doing the work) and selling services.

Business development in the digital age

One of the implications would undoubtedly be in the sphere of Business Development for law firms. Namely, the legal profession is known to enjoy face-to-face networking, something which is likely to change in present circumstances. 

What could be done differently? 

For example, lawyers and law firms may need to turn more to digital marketing to build their pipeline. And some could say that lawyers have been on social media for the past two decades. And they would likely be right. 

However, in times when global demand contracts, lawyers would need to do much more than post tweets, write LinkedIn posts, or post answers on Quora.

These, of course, help, but law firms would have to go even beyond. Lawyers will have to be much more strategic about how they spend their time, how, and where they focus their efforts.

Without going into many details (this is a subject for a separate article), law firms would need to start from the top in their business development efforts.

This means stepping back, rethinking law firm products or services, and then setting a digital marketing strategy according to your primary target group.

Once you have everything set, and once you launch your novel digital business development arm, you need to make sure you are following and measuring all the relevant metrics. That is the only way to learn if your efforts yield expected ROI.

“We will closely monitor how clients use our service, how our advertising and sales strategies correspond to conversion rates, what segment of potential users is most or least responsive, etc.

There is an abundance of experience in providing online services, and there is no reason for us not to adopt the best practices…”  - Marko Porobija

Will we see more legal digital products?

I feel the natural step for leveraging the Internet, digital marketing, legal tech, and get to scalability are digital legal products. But will we see more of them?

“Clients will get used to using ready-made legal products rather than calling their trusted lawyers…”  - Daniel Acevedo

And aren’t we all already used to the convenience of technology? Why would it be any different in the legal sector? The trouble is, there may not be many adequate products at the moment. But once there are, there will be no coming back. 

Just ask anyone to cancel their Netflix and rent a DVD.

Why would Biglaw want to reinvent?

Some commentators on Richard's article suggest that the biglaw business model would change only as the second (or potentially third) order impacts.

I could very much see that happen. 

The truth is, we are not aware of where we are heading right now. Unemployment across the board is unprecedented for at least a few decades back. Some are even drawing parallels with the Great Depression (let's hope for the sake of the whole world they are wrong).

So downsizing, as Ron Friedmann suggested, could be a knee-jerk. Some firms could go under, while other firms buckle up, hoping that the first-wave drop was the final one. 

And if they are wrong?  

"Once the COVID-19 health issue is resolved, there will be a lot of scorched earth in the world. Many economies will take years to recover, but there will always be a need for legal assistance.

What people will not be willing to do is to pay exorbitant fees if there is an option to subscribe to a legal service or to have fixed legal costs in general…" -  Marko Porobija

The evolution has to go beyond remote

To come back to Richard’s initial argument - 

Legal services will need to much more to satisfy future demand. It may be murky right now. However, IF the crisis prolongs and starts causing cascading effects, law firms wouldn’t avoid turmoil either. 

If the main takeaway in these times is that we can trust colleagues to work from the comfort of their homes, well… We’ve got much much more to learn still. 

Richard W. Smith coaches and supports senior lawyers. He helps them in developing and implementing business development plans, client acquisition, and retention strategies.

Richard is a member of CLOC; the Buying Legal Counsel; the College of Law’s LP Lab; APMP; and ALTA. He has also been trained in Project Management, Design Thinking, and Pricing legal services.

Ivan Rasic holds the Transnational Trade Law and Finance LLM, a program by Universidad de Deusto (Bilbao, ES), Universiteit van Tilburg (Tilburg, NL), and Goethe Universität (Frankfurt, DE). After his work in law firms and inhouse, he started a legal tech company.

Nowadays, Ivan leads STP Informationstechnologie GmbH's Sofia RnD center with project/development management, culture, strategy, and special project initiatives.

Ivan is an Ambassador at European Legal Tech Association (ELTA). He closely follows and writes on future of law, legal tech, ALSPs, and new ways of delivering legal services.

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